A Bright Spot for Solar Startups at SfunCube

Funding for early-stage solar startups is hard to come by these days. This could be a result of a lack of innovative entrepreneurs in the space to start with. Whatever the cause, there’s both room for improvement in supporting and cultivating young solar companies, and a need for making those improvements as solar deployment continues to advance.

Enter SfunCube, which serves as both an accelerator and an incubator for solar startups. It’s located in a 12,000-square-foot office beside a bay in Oakland, Calif. The name stands for “solar for universal need,” and is meant to capture its mission to accelerate the spread of solar to fulfill our population’s need for energy. Officially incorporated in January 2013, SfunCube was founded by Danny Kennedy, co-founder and senior vice president of residential solar installer Sungevity, and the program’s CEO is Emily Kirsch, previously the lead organizer at Oakland’s Ella Baker Center for Human Rights.

SfunCube serves capital light solar startups in the software, finance and analytics spaces that are focused on bringing down solar’s soft costs. Given the 70 percent decrease in module prices in the past few years, non-hardware related expenses – such as permitting, design, financing and customer acquisition – now represent the biggest opportunity for bringing down the overall cost of solar installations.

The first component of SfunCube, the incubator, is a hub for 10 or so solar and clean energy companies and non-profits. Each participant pays rent for a space in the office where they can collaborate or simply feed off of one another’s energy. They can stay as long as they’d like until they outgrow the space, then the network will help them settle into new digs.

Current incubator tenants include solar crowdfunding platform Mosaic, microgrid energy provider Power Hive, residential solar comparison tool Sunible and the California Center for Sustainable Energy.

The second component is the accelerator, which is a nine-month long program for up to 10 companies that each get about $20,000 worth of free rent, $10,000 in cash, about $50,000 in business services, and connections to mentors, advisors and investors, CEO Kirsch said at MIT’s Women in Clean Energy Symposium last September. The first startups were admitted in early 2013 and will end with the typical demo day on a yet to be announced date.

In exchange SfunCube owns five percent equity and a commitment from the company that it will stay in the San Francisco Bay Area as it continues to grow. SfunCube’s ownership lives in a shared equity pool that expires after 10 years; if a portfolio company is sold or goes public before that period, the funds earned go back into the program.

Angel investors fund the accelerator as a whole, meaning that they have a diversified investment across all companies that pass through the program.

“The real world is based on relationships that are built over time and so we try to cultivate those relationships in SfunCube,” Kirsch said at MIT’s symposium. “So if an angel investor that has invested in us really likes a particular company, we definitely facilitate the relationship to help make an add-on investment and don’t take a cut. We just want them to get money and be happy.”

To further nurture innovation, SfunCube organizes Solar Hackathons that bring programmers, designers and business types together for a weekend to create solutions focused on accelerating solar development. Last year’s participants competed to win two prizes worth $1,000 and one for $2,000.

The top prize at their hackathon last September was EcoSpaces, a networking app that connects people and provides media and resources around sustainability and green buildings.  The prize for best technical accomplishment went to WattSun, a solar education web app.  And the prize for best user experience went to Appliansun, an app to help people shift the load of energy-intensive appliances to optimize their solar energy generation.

Based on Kirsch’s comments at the MIT event, SfunCube is anxious to see what solutions solar entrepreneurs are developing and encourages more to enter the space.

“I believe that solar entrepreneurs are out there, you know the solar entrepreneurs that are working out of cafes, working out of their garages and working out of their homes, and they’ll come to us and say ‘I didn’t know you’re here and I’m so happy to be here,’” said Kirsch. “We have a dozen inhouse now between the incubator and the accelerator, and I wonder, and sometimes I keep myself up at night thinking, are they out there and are we going to be able to find them and support them?”

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