Banking on its award-winning modular solar power solutions, Solatom is setting its sights on winning contracts worth €11 million in 2021. Valencia's innovative producer of mobile solar energy generating systems has just gained international recognition by winning the Startup Europe Awards 2018 in Spain for the climate category.
Solatom is now gearing up to be a key player in the solar power sector by providing businesses with pre-assembled, transportable thermal energy collectors that can be installed in just one hour as a Plug and Play system. The mobile panel systems, that can easily be installed, dismantled and quickly moved to another location, may be just the boost needed for the solar energy sector that hasn't grown as fast as expected in Spain. The slow uptake is mainly due to the complex and high costs of installing and running Concentrating Solar Power (CSP) plants.
Usually, solar mirrors have to be assembled on-site over a long period of time which results in high maintenance costs. CSP systems are expensive options, especially for SMEs that make up the overwhelming majority of Spanish business communities. SMEs often pay up to three times the energy costs of larger companies, Solatom's CEO and co-founder Miguel Frasquet Herraiz told CompassList.
Cleantechs like Solatom can also help to develop more efficient energy solutions for businesses seeking more eco-friendly production models to meet the EU target of producing 27% of the region's energy from renewable sources by 2030. Solar thermal energy options are especially suitable for southern Europe's sunny climates. Each solar energy module can cut CO2 emissions by nine tons a year.
Tech-savvy marketing
Amongst the different types of renewable energy, solar thermal energy is widely used across multiple industries like F&B, chemicals, textiles, laundry and agriculture. Solar energy also reduces CO2 emissions since sunlight is easily collected and concentrated to produce the high temperatures needed to generate electricity.
Solatom is targeting industries that use fossil fuelslike the food-processing sector, a market worth €14 million in Spain alone. The combined market value of fossil fuel industrial sectors is estimated to be worth €2.15 billion. Factories using natural gas in southern Europe will also offer business opportunities in a market valued at €15 billion, according to Solatom.
To validate its commercial strategy, Solatom conducted industry research in collaboration with Solar Concentra, a platform built by prominent players in the solar thermal and CSP sectors for R&D projects. The results showed that the average annual consumption of thermal energy in Spain was 27.6 GWh for big companies and just below 1.35 GWh for SMEs. Therefore, Solatom offers a cheaper alternative, especially for SMEs since the price of fuel will vary a lot according to the amount of energy used.
The company is also investing in technology to optimize lead generation and sales conversions. Using data from Solar Concentra, Frasquet has developed a probability algorithm PABLO to identify the best leads in the market. PABLO generates more accurate SME leads by comparing a company's size and turnover with industry data like heat demand, solar irradiation and fuel prices. It also computes consumption and cost estimates to assess the potential benefits of Solatom solutions for potential leads.
The estimates are run through a free online calculator RESSSPI that is used mainly by engineers to run feasibility studies. Based on industry and client data for energy consumption and CSP plant configurations, the research data is used to estimate a client's investment costs and the amortization of the initial investment.
For example, a Solatom system may cost €200,000 to €1 million, depending on the required solar thermal design and components. The new solar power solution can cut energy consumption costs by about 37% and pay off the capital investment over 3–5 years.
Solatom has strategically adopted this approach throughout its sales funnel. “Many of the PABLO leads contacted were highly interested in our solutions from the beginning,” R&D manager and co-founder Carlo Terruzzi told CompassList. “What we've done basically is to build pre-assembled modules that don't require complex on-site installations. We manufacture in-house to attain economies of scale.”
First MVP
The idea for Solatom started in 2014 when Frasquet was working for a German company. Industrial Solar developed solar thermal systems that optimize industrial applications, such as pilot testing Linear Fresnel power plants and solar thermal systems for steam generation. Frasquet also noticed that oilfields have an average maximum useful life of five years, resulting in many solar plants being dismantled and abandoned after this period.
As a result, Frasquet came up with the idea of building transportable CSP plants that could be deployed across locations and industrial processes. He conducted further research for his PhD thesis: Solar steam generation for enhanced oil recovery - Development of a transportable solar system for Thermal EOR. Frasquet and another post-grad Raul Villalba van Dijk were both doing research on thermal energy at the University of Seville and they decided to patent the Solatom project in 2015.
In 2016, Solatom was initially bootstrapped with only €60,000 from CFO and co-founder Villalba van Dijk. CTO and co-founder Juan Martinez joined the team to build the first prototype that was later scaled down and presented to Lanzadera, one of the biggest business incubators and accelerators in Spain. Terruzzi came on board as co-founder when Solatom was chosen to participate in the Lanzadera Garaje acceleration program in 2016. The Italian mechatronics engineer helped to develop the automation and mechanics of the first MVP for Solatom.
Seizing opportunities
In 2017, Dadelos Agrosolutions in Valencia became the first client to install a Solatom CSP module. Seven months later, a second one was also installed for Dadelos. The first commercial product was released later in the year for a second customer Margalida in Girona. The Girona project involves the use of mirrors in thermal water applications. Another project is an ambitious air-heating solution for the Carlos III University in Madrid.
Solatom is increasing its production capabilities to support further expansion in the CSP sector. The company has recently signed an agreement with Indertec, a company that develops industrial and energy facilities. Indertec will be responsible for Solatom's CSP production and installations throughout Spain.
In 2018, the startup received a grant of €45,000 as part of the EIT Climate-KIC accelerator program. Solatom also secured funding of US$150,000 from Norwegian Katapult Accelerator that has an equity stake of 8%. The total revenue for 2018 was €300,000. The objective is to complete 18 projects to generate revenues totaling €2.8 million by 2020. Pitching to potential investors, the company aims to achieve positive cash flow by 2021, with projected revenues of €11 million.
“The idea, for now, is to focus on the Spanish market where we've received a great response so far. Once we've consolidated our business and market position in Spain, we'll be definitely looking into international expansion,” Terruzzi explained. “From an international perspective, the most attractive markets for us are Portugal, the southern areas of Italy, North Africa and Latin America.”
