Melbourne-based start-up DC Power Co has launched a pilot version of its solar “prosumer” focused electricity retail service, after raising $5 million through a second investment round.
DC Power Co said on Monday that it had closed out “an oversubscribed” fundraising round and switched 800 of its investors to the new beta retail service last week, ahead of its public launch in February 2019.
The company came on the scene in March, with a crowd-funding round looking to attract rooftop solar households “fed up with being short changed by major energy retailers,” and keen to be a part of the solution, for an investment of just $50.
DC Power said this week that more than 12,500 investors had tipped in $2.2 million by the end of April, while the latest round had raised $5 million in equity, led by St Baker Energy Innovation Fund (StBEIF) and WIN TV.
“We already have more individual shareholders than many ASX listed businesses and we only started trading last week,” said DC Power Co CEO and chairman Nic Frances Gilley.
“We believe that trust and service in this industry is at an all-time low, so it’s time that customers who use the service can also be owners who share in the profits of the business.
“Last week we saw a bunch of (energy retailer) CEOs saying the problem with solar was that it was mucking up the market. I mean, blaming consumers for taking up solar is outrageous,” Frances Gilley told One Step over the phone.
“The thing for us, that we’ve been working on for two years now, is that we’ve crowd-funded a company to deliver real value to people with solar and for people who thinking about it investing in it.
“We’ve had people investing $200 each (for us to) go and build a business that’s fair-dinkum about serving people with solar.
“It’s like an old-fashioned mutual. And I think that’s fair-dinkum. We’ll be the only company that’s got that direct relationship with their customers.”
As we reported here in March, the company will use an entirely different business model to most retailers, where customers pay a monthly membership fee of $10 in exchange for access to hedged wholesale power prices and higher tariffs for any solar they export to the grid.
“We go out to market for a retail hedged price, and we obviously want to get the lowest price possible. And we don’t add a margin to that. So we have no incentive at all to sell more energy,” Frances Gilley told One Step.
“Our business model is not linked to selling more energy, our job is about getting our customers’ bill as close to zero as we can,” he said.
But another of DC Power’s key goals is to ensure its customer are getting maximum value from their rooftop solar systems, with free solar performance checks, advice on how to use their solar energy more efficiently, and access an energy plan.
“We want to be the only retailer that tells you when your solar is not working; gives you feedback on how your system is performing compared to your neighbours, and tips on how to use your energy more efficiently, ” Frances Gilley said.
“We then really want to focus on reducing wholesale pricing, and look at what we can do on distribution costs,” he added.
“We want to see if we can get to a scale where we can change the way the market really works… We will be advocating for pricing change for peer-to-peer energy trading, for discounts to battery storage.
“I mean, you have the (major) retailers complaining about what solar has done to the market. But it’s the firming of the market that is the issue, not the fact that we’ve got more solar.”
The company’s public launch, which Frances Gilley says will be on February 14 – “because we love solar” – will see the company offer power (and gas) retail services in Victoria, New South Wales and south-east Queensland. And as more customers sign up to DC Power Co, more investment opportunities will be offered.
“Our goal is to get to hundreds of thousands of solar customers,” Frances Gilley said. “And wherever we can, we want our customers to be share-holders, if they want to be.
“Customers actually need to be treated as (energy market stake-holders) who are serious, who have put their money in, and who are wanting to make change.
“We want to consistently create incentives for more people to buy in. (People who) want to be an owner and to earn from the profits of the business, but also to be an advocate for (rooftop solar).”
The company has also announced a new board member, with the CEO of the StBEIF – which was set up by energy investor Trevor St Baker to support early-stage clean tech opportunities – Rodger Whitby joining the team.
“We are really excited about both DC Power Co’s strategy for helping customers manage their non-traditional power mix, such as PV and electric vehicles, and its campaign style of growth that will offer customers the opportunity to become owners,” Whitby said in comments on Monday.