Regulatory approval for this subscription solar UK startup could mean more are to come

With the U.K.’s Financial Conduct Authority (FCA) authorizing what’s believed to be the first time a company can provide solar panels and batteries on a subscription model — without subscribers needing to pay a lump sum upfront — the stage could be set for a new boom in solar subscription services. This will provide useful competition in the market, and a new arena for tech investors to mine.

U.K. startup Sunsave got the FCA go-ahead this week, with its proposal to provide solar panels and batteries on a subscription model. The Oxford-based startup has also raised a £5.4 million ($6.7 million) seed round led by “impact”-oriented VC Norrsken, as well as previous investors IPGL, Plug and Play and angel investors Stuart Rose (chairman of Asda), Michael Spencer (founder of Nex Group/ICAP), Roland Rudd (founder of Finsbury) and Bill Nussey (author of  “Freeing Energy”). It’s now raised £9.2 million ($11.5 million) in total in its 18 months in existence.

Sunsave is following a trend from the U.S. and continental European companies. Enpal in Germany is a significant solar player, with six years in the market and large revenues. Enpal is backed by SoftBank, and in June raised $464 million in debt funding to finance its leasing business.

Then there is YC-backed SolarMente in Spain, which raised €50 million debt and equity from PE firm GNE Finance in April.

Meanwhile in the U.S., the model is slightly different, with many companies offering both solar subscriptions and leases for many years. However, the market is increasingly shifting to subscription, and includes large players such as Sunrun, which is on the Nasdaq.

In the U.K. “solar lease” has been the predominant model, under the feed in tariff scheme, but customers don’t even end up owning the solar panels on their own roof and can’t easily exit the leases. It’s a bum deal, and consumers know it. The result has been the extremely slow take-up of domestic solar in the U.K.

Thus, Sunsave appears to be following the U.S. and Continental European models — now approved by regulators — of the flexible, loan-based subscription model. This means the customer fully owns the system and there aren’t any early repayment fees or penalties.

The news fires the starting gun on other subscription-based solar startups that could even feasibly run on micro-grids and sell energy back to other larger suppliers.