Charlotte’s Palmetto Clean Technology is raising as much as $2 billion to help speed the pace of residential solar and home electrification projects.
It raised $1.2 billion in 2024, $300 million in January and expects to take on another $500 million by March 31. The money will provide financing as the company expands its base of 500,000-plus customers. About 80% signed on last year as the company’s revenue growth more than doubled, CEO Chris Kemper said in his annual letter to shareholders in early February.
“Modeled after Credit Karma’s free and easy-to-use educational tools, we felt that the consumer product and experience is our sector’s front-and-center opportunity,” Kemper said in the letter. (Credit Karma is an online fintech company owned by Mountain View, California-based Intuit.) “The key to making it all work is a strong product, an intelligent back-end and a monetizable consumer journey; we have all those things.”
The pitch has made Palmetto “one of the fastest growing fintech platforms in the U.S. market,” Kemper said. He declined interview requests.
Investors backing Palmetto include Charlotte-based Truist Bank, which put up $125 million late last year and is considering another infusion, Bloomberg reported. Shell Ventures, TPG, the Social Capital venture capital firm and a dozen other investment firms have put money into the company, according to Palmetto’s website. Board members include Chamath Palihapitiya of Social Capital and Steven Mandel of TPG.
In his annual letter to shareholders a year ago, Kemper said the company expected to rebound from “one of its most challenging years [in 2023]” with expected 100% growth and “sustained profitability” in 2024. The current letter says 2024 was a “profitable year,” but details were available to investors only.
Kemper’s bio says he has studied at MIT, UNC Chapel Hill, Ball State University and Rhodes College. He started the business in London, shifted to Charleston, South Carolina, and then moved the headquarters to Charlotte in 2023, saying it planned to have 200 employees.
Last July, Palmetto joined a venture to own and operate thousands of residential solar and battery systems in low-income communities in Puerto Rico.
Residential solar energy adoption is clearly viewed as a growth industry, but making money has proven difficult. San Francisco-based Sunrun went public in 2020 and has reported cumulative losses of nearly $2 billion over the past five years. Sunnova Energy went public in 2019 and has reported losses of nearly $1.4 billion since then. Sunrun has a market cap of $1.8 billion, compared with Sunnova’s $253 million. Kemper predicted “another public company insolvency in our industry in 2024.”
More people adding solar panels to their homes are leasing them rather than making outright purchases, a trend that prompted changes in Palmetto’s strategy. The era of zero-interest rate financing offers is over, Kemper noted. The “new normal” rates have created more balance between solar system owners and those leasing, and “given rise to stronger fiscally managed operators,” he said.
The solar industry is wary about the Trump Administration’s view of alternative energy, which has relied heavily on favorable tax policies to attract customers. While Donald Trump is famous for “Drill Baby Drill,” he also has said he “loves solar power.” Last year, Palmetto named former Federal Energy Regulatory Commission Chairman Neil Chatterjee, a Republican, as its government affairs chief.
Palmetto “is paying particularly close attention to the tax credit elements for solar and stationary storage,” and rules that could require more domestic production of solar equipment, Kemper said.
Big money or not, Palmetto views itself as mission-driven. “I believe our work is crucial for the broader mission of climate change mitigation beyond simply Palmetto; our success will inspire and encourage others to follow the path, but only if success is attained.” ■