If you’re a renter and you want solar power, you’re usually out of luck. For most, the only option is a community solar program, where people subscribe to utility-scale projects, but they’re not available everywhere. And given that most renters only stay for a few years, which of them are going to pay tens of thousands of dollars for solar panels — and what landlord would let them?
That’s where PearlX comes in. “Think of us as like the Sunrun for renters,” said co-founder and CEO Michael Huerta, referring to the company that rents solar installations to single-family homeowners. “PearlX is a rental electrification platform.”
Earlier this year, the startup began installing solar panels and backup batteries at multifamily rentals in Texas as part of its “TexFlex” project. PearlX’s next step, which Huerta shared exclusively with TechCrunch, will be a California expansion called “Flexifornia.” The startup is also rolling out a virtual power plant, which will allow the company to tap the batteries in times of high electricity demand to help lower tenants’ utility bills.
PearlX’s expansion plans are being fueled by a Series B of up to $70 million that values the company at $115 million. The round was led by Swiss asset manager Lombard Odier. The company has raised just under $5 million in previous rounds, Huerta said.
“This round is really focused on two things,” he said. First is addressing the company’s backlog. “We’ve got landlords with about a couple thousand tenants that are ready to go and super excited.” A handful of projects are complete and about a third of the backlog is at various points in the construction process. The company has also earmarked some money for the California expansion.
“Second is really being able to provide that extra layer of electrical amenities,” Huerta said. Many landlords use amenities to try to build a positive relationship with their tenants, he said, and solar and electrification have become a priority for many. In places like Texas, where the grid has grown unstable in recent years, backup batteries that keep the lights on in case of blackouts are another draw.
But beyond that, Huerta sees solar installations as a foot in the door, allowing PearlX to become an electric amenity provider to landlords. That might include installing heat pumps, energy-efficient lighting in common areas or EVs that are made available to the community, a sort of electric ZipCar for renters who need access to a vehicle. Not only would the car be another amenity for renters, but it also gives PearlX another place to stash excess electrons after renters’ batteries are topped off. Since the passage of the Inflation Reduction Act, Huerta said that PearlX has been receiving tons of emails from prospective customers.
PearlX enters into lease agreements with landlords where the company pays rent for the right to manage the electricity in a community for 30 years. Those contracts also include rights to host the solar and battery installations, which the company operates and maintains. PearlX then sells the power to the tenants, offering them a 5% to 10% discount off the rates offered by the local utility, a deal that’s good for the duration of their tenancy, typically three to four years, Huerta said. Landlords handle the billing and pass the money on to PearlX.
The company also aggregates the batteries in each rental community to create a virtual power plant that can put electricity back into the grid. Huerta said that their system works to prioritize tenants to ensure they always have power. If the system determines there’s going to be excess, it’ll sell some power back to the grid.
“Each renter gets a battery, and so if the grid is down, that renter’s getting the solar power through the battery. If the grid is up, we’re sort of aggregating all of the electrons and figuring out what’s the best way to flex it back to the grid,” Huerta said.
While single-family homeowners have been able to do this for a while, renters have been largely ignored. It’s why Huerta and his co-founder, Pete Mendonez Jr., launched PearlX — they wanted to bring the energy transition to renters.
“We launched specifically to create deployment-based innovation for renters, specifically multifamily real estate and single-family renters at master-planned communities,” Huerta said. “We started essentially underwriting renters because renters had been locked out of the capital markets.
“Really, what this is about — it’s about energy access, energy savings and energy deployment.”