“No one forced us to use smartphones,” says Philipp Schröder, managing director of the Hamburg start-up 1Komma5Grad. A phrase that says a lot about his statement. The former head of Tesla in Germany wants to offer solutions that are perceived as significantly better than conventional products. He believes it is possible to achieve an “iPhone moment for the energy transition.”
Hamburg’s only “unicorn”.
The company co-founded by Schröder in 2021 stands out in the start-up scene: according to the industry association it is Hamburg’s only “unicorn”, i.e. the only young company valued at more than a billion dollars. The company achieved this status this summer. “German start-ups are reaching unicorn status faster and faster,” says CEO of the start-up association Christoph Stresing.
1Komma5Grad is represented in seven countries with 68 locations and around 1,700 employees, as Schröder reports. The name says what the goal is: to limit global warming. The company advertises its search for skilled workers on its website with the words: “Make your contribution to climate change now.” Below is a countdown until the global CO₂ budget is exhausted.
By 2030, the start-up says it wants to become a market leader across Europe capable of “converting 500,000 buildings per year into climate-neutral energy, heat and mobility production”. At that point, sales are expected to increase by up to ten billion euros per year. This year the company expects a turnover of around 500 million euros, with a pre-tax return of just under 10%.
Central system: “Heartbeat” software platform.
1Komma5Grad does not focus on a single product, but rather on the combination of several products and services. “From the customer’s point of view, we offer all the necessary services for a photovoltaic system, a heat pump and a charging infrastructure from a single source,” says Schröder. From craftsmanship to software to access to the electricity market, an attempt has been made to bring the value chain under one roof.
“Our customers receive a closed ecosystem that should resemble that of Apple,” says the 40-year-old. At the heart of this system is the company’s software platform, “Heartbeat”. It networks and controls the products offered by 1Komma5Grad: solar systems, heat pumps, electricity accumulators and charging stations for electric cars. The goal is to increase the self-consumption of self-produced solar energy and shift the residual consumption to a financially and ecologically sensible time. The promise: Cheap electricity and green electricity should go hand in hand.
Electricity consumption should follow renewable supply
“The wind and the sun provide free primary energy,” is Schröder’s premise. However, they are often not there when you need them. The CEO is convinced that the electricity market must change radically: “In a world of renewable energy, consumers, not people, but electricity consumers, must follow what the wind and sun have to offer. Just like a sunflower, which follows the sun’s rays throughout the day.”
According to Schröder’s assessment, most electricity consumption can be adapted to the availability of sun and wind. For some time there have been “so many renewable energies that when there is a lot of wind and sun, the price of electricity on the electricity exchange drops and electricity is regularly even free.” However, customers do not benefit because they have fixed electricity rates.
Dynamic electricity tariffs
From 2025 all electricity providers should offer dynamic electricity tariffs, where the price of electricity increases or decreases depending on the offer. According to the Federal Association of Consumer Organizations (VZBV), it has so far been a niche product. Consumers view the costs of dynamic tariffs as a double-edged sword, says energy expert Sabine Lund: in a survey, they often cited as an advantage the possible lower costs due to cheaper electricity compared to a conventional tariff – and incalculable and possible higher costs due to more expensive electricity, most often as a disadvantage.
Since September 1Komma5Grad has been offering a dynamic electricity tariff which, according to the company, differs from others: the company controls connected systems such as a heat pump using its own software in such a way that an average annual electricity price of a maximum 15 cents per kilowatt hour can be guaranteed.
Schröder describes it as “the cheapest electricity tariff in Germany”, but there are restrictions. The price guarantee only applies to devices that can be flexibly controlled via the “Heartbeat” energy manager – i.e. heat pumps, charging stations for electric cars and electricity storage batteries – for a maximum annual consumption of 2000 kilowatt hours per connected device. If the network fees, taxes and fees are less than 12 gross cents per kilowatt hour it applies for two years, otherwise the guaranteed price gradually increases up to 23 cents.
Lund, spokesperson for VZBV, finds it questionable that consumers can compare this tariff with other offers. When changing supplier it is important that you can see the future electricity costs at a glance, he emphasises.
IPO targeted for 2025
Electricity consumption in line with the sun and wind. Hundreds of thousands of buildings to be reconverted every year. The start-up 1Komma5Grad says it wants to contribute to the energy transition with its goals and needs more money for its projects. The company is therefore aiming for an IPO in 2025.