Singapore-based startup Solar AI Technologies has recently closed its $1.5 million seed round led by Earth Venture Capital.

Solar AI Technologies said in a statement on Wednesday that the round also saw participation from Undivided Ventures, Investible and climate-tech angel investor David Pardo.

According to the statement, the funds raised would primarily be used to upscale its rent-to-own solar program within Singapore, before embarking on regional expansion in the next 12 months.

The Solar AI rent-to-own program enables landed homeowners and small businesses to own solar panel systems at zero upfront costs, paying a flat monthly fee which covers the installation, maintenance, and servicing, as well as an energy generation guarantee.

Compared to the traditional solar offer that demands an upfront cost of $15,000 to $50,000, the rent-to-own model helps de-risk solar as a renewable energy solution, particularly in Southeast Asia where trust and awareness in the technology is still low and has a penetration rate of less than 1 percent.

Since the global energy crisis, prices of grid electricity within Southeast Asia have increased by close to 30 percent, alongside increasing policy support and market demand for renewables.

However, more than 95 percent of rooftops in Southeast Asia still do not have access to zero-upfront or leasing options for solar, which can contribute more than 200 megatons of carbon emission reductions per year.

“I’m thrilled to see Solar AI closing the next milestone of investment, setting them up for a successful growth,

“As a collaboration with ENGIE Factory since launch, we’re impressed by their track record of success, combined with their talented team, and their aspiration to disrupt the solar industry.” said Caroline Guyot, Co-Founder and Managing Director of ENGIE Factory Asia-Pacific.

According to the start-up, more than nine out of ten customers will choose rent-to-own rather than paying upfront for a solar system.

To date, Solar AI Technologies has surpassed SGD 3 million ($2.22 million) on signed rooftop solar contracts, with more than 100 rooftop solar installations completed last year.

“Investing in Solar AI Technologies allows Earth VC to support the hyperscaling of solar installation in Southeast Asia through the rent-to-own model that will address pressing environmental challenges,

“Their visionary leadership and commitment to innovation make Solar AI a compelling investment opportunity,” said Linh Nguyen, General Partner of Earth Venture Capital.

Ben Lindsay, Investment Manager at Investible added, said that there is a huge amount of untapped potential for both residential and commercial solar-as-a-service throughout Southeast Asia.

“The traction and robust pipeline Solar AI team have achieved to date is a strong indicator for their ability to be a leader throughout the region as its development continues to accelerate,” he said.

Through Solar AI Technologies’ rent-to-own model, the company eventually aims to lead the energy transformation across the region to a net zero world, making it as easy as possible for property owners to get solar with a risk-free, fully-serviced solar experience.

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