1 Annual Report
2022
Annual Report
2022
Annual Report 2022Page 2
Table of Contents
4 CEO message
6 Key figures 2022
7 Highlights 2022
8 Risk management
13 Strategic report
16 Corporate governance
22 Sustainability in Otovo
52 Subscription metrics
54 Directors’ report
60 Board of directors
62 Executive management
64 Financial statements
123 Parent Company Financial Statements
157 Definitions
158 Appendix, GRI Index
Annual Report 2022Page 2
Annual Report 2022Page 3
As we sum up the
year, I can say that
the Otovo team rose
to the challenge
that friction
represented
“Team Solar” defies crises
We came out of 2021 on a wave
of demand fuelled by rocketing
gas and electricity prices. We
were growing installations at a
steady 100 % annual growth
rate, as we had come
accustomed to over the last two
years. We saw early signs of
succeeding in Germany, where
we had launched in the final
weeks of 2021. The pandemic
was letting go of society and
indications for the year ahead
seemed rosy.
Little did we know. War was
approaching Europe for the first
time in decades. Supply chains
would have «long covid» as the
pent up demand hit them at a
time where shipping, production
and sourcing were dislocated.
The clouds of protectionism
were gathering. 2022 would be a
year of friction.
As we sum up the year, I can
say that the Otovo team rose to
the challenge that friction
represented.
New markets launches
succeeded
In February we raised EUR 30
million to enter six new markets,
seeing that the Otovo
lightweight marketplace model
had advantages over more
traditional residential solar
players. Within months we
would be up and running in
Portugal, quickly followed by
Austria and the United Kingdom.
Then we moved to the second
wave, launching Switzerland,
Belgium and the Netherlands in
quick succession before the
year ended. From funding to
building web sites, establishing
the legal framework, recruiting
general managers and teams
and completing the first sales in
six markets, we spent nine
months.
Supply chain chaos
In the first quarter of the year,
labour supply in solar could not
meet the explosive demand as
electricity price increases
rippled through Europe from
North to South. Then shortage of
inverter supply held the market
back, a problem that would last
from the end of the first quarter
to the middle of the third.
Freight costs also shot up,
leading to a reverse in the
otherwise reliable rule of thumb
that solar module prices come
down by ten percent per year.
Being a platform that would
grow to more than 700 installer
companies, without ware-
houses and inventory, the
friction represented a
challenge. But through great
communication with whole-
salers, intimate work with
installer companies and some
strategic purchases to deblock
bottlenecks, we overcame it.
Installations doubled from 2021
to 2022, testimony to our ability
to deliver even under
challenging conditions.
CEO message
“Team Solar” defies crises
Andreas Thorsheim
CEO and founder
Annual Report 2022Page 4
Annual Report 2022Page 5
A clear mission
Otovo’s mission is to put solar on
every roof and batteries in every
home in Europe. With a backdrop
of erratic traditional electricity
prices, the benefits of solar
became apparent to all.
In 2023, we need to keep that
knowledge fresh and alive, in the
mind of the homeowner and in
the eye of the public and policy
makers: Solar energy production
and home energy storage have a
leading role to play as Europe
replaces 1,600 terawatt-hours of
energy that only in 2021 was
supplied by Russia.
Andreas E. Thorsheim,
CEO and founder
That responsibility will only grow
as the world takes on the task of
building out the 15,000
terawatt-hours per year of new
clean electricity needed to
replace all fossil fuels in
electricity production.
In the year ahead we will be
pushing new and old markets to
take market share.
Efficiency as we scale will be the
focus, to bring more Otovo
business units to profitability.
Developing the financing and
later monetization of the
subscription portfolio will be the
other major battle.
And then third, we will begin
work on creating the premises
to increase the value creation
from the flexible assets in the
portfolio to provide grid
services, play in aggregation
markets, or arbitrage
differences in power rates
beyond what is possible for
single households.
With a uniquely fit cross-
European team to realize these
ambitions, I am confident in our
trajectory.
Key figures 2022
638m
Revenues
(IFRS)
(2021: 285m)
9,505
Net
Sales
(2021: 5,534)
846m
Revenues
Generated
(2021: 311m)
13
Countries
Present
(2021: 7)
The share
The share
Otovo has been listed on Euronext Growth Oslo since 19 February 2021
with ticker OTOVO.
On February 14th 2023, Otovo transferred to the main list on Oslo Stock
Exchange.
Annual Report 2022Page 6
305m
Accumulated Contracted
Subscription Revenue
(2021: 94m)
7,379
Completed
Installations
(2021: 3,822)
Annual Report 2022Page 7
Highlights 2022
More than 30% of Otovo’s
sales are done on a
Subscription model
EUR 30 million private
placement to enable the
launch of 6 new markets
Launch of Portugal,
Austria and UK completed
on time and budget
Otovo completes
acquisition of EDEA, its
Subscription SPV, bringing
the Subscription SPV under
full control
Divestment of the Brazilian
JV, Holu, to focus
management and capital
on 13 European markets
6 market entries
completed, with launch
of Netherlands, Belgium
and Switzerland
Otovo completes its
2000th sale on the
marketplace model in
France, while surpassing
the number of sales and
installations in 2021 for
the Group
Feb
Jun
Jul
Aug
Dec
Annual Report 2022Page 8
Procedures for risk management in Otovo are governed by the Group’s risk management policy.
The ultimate responsibility for risk management lies with the board, whereas the Audit Committee
oversees that the Group has sufficient systems for risk management in particular related to
financial reporting.
The Executive Management has the responsibility for establishing sufficient risk management
processes and controls, ensuring that they are executed as intended, adjusted if needed, and that
necessary mitigation actions are in place to reflect the risk situation at any given point in time. The
major risks of the group are reviewed on a regular basis.
The responsibility for the day to day risk management is not delegated to a specific function, but
lies with the line and each manager. This responsibility includes ensuring that operations are in
compliance with internal and external rules and regulation.
Commercial risk
The primary commercial risk for the Group is related to general economic conditions and statutory
regulations in various geographical markets which have an impact on the experienced
attractiveness of the product offering of the Group.
The services and products offered in the respective geographical markets are subject to local laws
and regulations, including temporary incentive schemes introduced to facilitate the transition to
renewable energy sources.
Any legislative changes concerning incentive schemes could affect the Group’s earnings, market
position and range of products and services. While the commercial risk by nature is difficult to
mitigate, Otovo closely follows changes in policies and macroeconomic conditions on an ongoing
basis. In addition, incentive schemes are mainly national or regional schemes in each country,
hence the Group’s exposure to incentive schemes is diversified, with presence in 13 countries.
Notably the change in incentive scheme in Poland at the end of Q1 2022, resulted in a large drop in
demand in Poland, but had only limited impact on the Groups total results.
Business model
The Group’s business model consists of selling solar systems and batteries to end customers
delivered through turnkey installations purchased from local installer companies. Customer prices
are determined based on the installer companies’ offers on the Otovo platform with the addition of
the Group’s own margin. While the installer companies are bound by the prices they offer on the
platform, the Group is still reliant on the installers being able to deliver. In a situation with high
demand or where hardware prices are increasing, enforcing contracts towards installers may not
be commercially viable, as the installers may choose to leave the platform or may incur
unbearable losses. In such a situation the Group may face pressure on margins or losses.
Risk management
Annual Report 2022Page 9
Supply chain
The solar panels and other material delivered to
the Group’s customers are produced by large
producers mainly situated in China or
fabricated by Chinese companies in East Asia.
The inverters delivered to the Group’s
customers are delivered by a limited number of
global manufacturers. The Covid 19 pandemic,
political and macroeconomic factors, notably
trade and tariff disputes have caused and may
continue to cause disruption to import supply
chains of the Group. However, when certain
components are unavailable in certain
countries where the Group is present, the Group
is often able to change deliveries to other
components or to components from other
countries. The Group is monitoring global supply
chains closely, and is looking at ways to
mitigate shortage of components or price
increases.
Macroeconomic environment
The ongoing war on Ukraine, still creates
uncertainty and is a risk to the European
economy. A further escalation outside Ukraine
could impact the Group’s supply chains, in
particular if Asian supply chains are affected..
During 2022 the reduced export of natural gas
from Russia to Europe, resulted in soaring
electricity prices across Europe, which again
resulted in high demand for Group’s products.
Into and during 2022 both Europe and the US
have seen dramatic rise in inflation driven by
low unemployment, high demand and partly
disruptions in supply of goods. The inflation has
affected the cost of the products the Group
offers in most countries. While the Group
operate on a “cost plus” business model and is
able to reprice its products to reflect increased
costs, an increase in prices to customers will
over time reduce demand. In addition, as a
response to the high inflation, central banks
have raised their interest rates significantly
during 2022 which normally would reduce the
general purchasing power of consumers.
The Group’s value proposition to its customers
is that the total energy costs will be reduced by
going solar. However, the direct purchase
offered by the Group product entails an upfront
investment that for certain customers will be
less affordable in a situation with high inflation.
Consequently, the inflation and the central
banks’ response may decrease the demand
and reduce the results of operation of the
Group.
Regulatory incentive schemes
In certain countries like Italy and Sweden, the
Group’s customers are entitled to a tax credit
when purchasing the Group’s products. In line
with market practice in the respective markets,
the Group has accepted such tax credits as
part of the consideration for the purchase. Tax
credits are accounted as non-cash
consideration under IFRS and the fair value of
the non-cash consideration is included in the
transaction price. To the extent the Group
should be unable to claim or resell the tax
credit, or the tax credits are resold to a lower
price, this will result in loss of revenue and
reduced margins.
Annual Report 2022Page 10
In addition, the tax credit incentive scheme in
Italy has been subject to several changes, and
in February 2023, the Italian government
announced an immediate stop to the
consumers’ right to sell their tax credits to
companies like Otovo. As a consequence the
Italian consumers will now have to pay the full
price of their solar and battery installation and
instead deduct the tax credit from their tax bill
over 10 years.While the change in regulation has
to be approved by the Italian parliament, the
proposal has created uncertainty and is
expected to reduce sales in Italy in the short
and medium term.
Financial risks
Market risk
The Otovo group is financing its activities in the
financial markets and is thus exposed to market
risk. The Group listed on Euronext Growth in 2021,
and recently uplisted to the main list on Oslo
stock exchange in February 2023. As a listed
company, the group considers the access to
funding to be good, something that has been
confirmed with fundraises in 2021, 2022 and
2023.
In January 2023 the Group obtained a new debt
facility with the two Norwegian financial
institutions DNB Bank and Sparebank 1 SR Bank
of up to EUR 100 million where EUR 50 million is
committed and EUR 50 million may be added
through an accordion option. The new facility
replaces the previous NOK 150 million facility
from Nordea Bank. Through the debt financing
the group is exposed to market risk related to
fluctuations in interest rates and currencies in
the countries where the group has operations
as the interest rates vary with the respective
IBOR-rate. Consequently, the Group is exposed
to the risk that its financing costs may increase.
This risk is mitigated in two ways. The monthly
payments from the customers are subject to an
annual CPI adjustment, which is expected to
compensate for increasing financing costs to a
large extent. In addition, the implicit interest
rates in new customer contracts may be
increased if the financing costs increase, giving
higher recurring revenue in the future.
Overall the risk related to interest rates has
increased during 2022, with the increased
central banks rates. However, taking into
consideration the mitigating effects of inflation
adjustment and yield adjustment on new
contracts (as described above), the Group has
decided to maintain its policy not to enter into
interest rate swaps to hedge interest rate risk.
The Group is exposed to currency risk related to
investments in foreign entities and proceeds
from these investments that vary with changes
in the foreign exchange rate. The net income of
the Group is also affected by currency
fluctuations, as the profit and losses from
foreign operations are translated into NOK using
average exchange rates for the period.
To the extent possible, the Group intends to
finance its operations through debt financing in
the respective countries’ currency. The Group’s
current policy is not to hedge its currency risk
through FX futures or other derivatives.
The currency risk for each of the Group’s
subsidiaries is limited as each entity has its
revenues and costs in its local currency.
Wholesale prices of materials may to a certain
extent vary with variations in foreign exchange
rates, that will influence prices to customers
which again could affect the attractiveness of
the product.
Liquidity risk
While the Group has a strong cash position, the
subscription business is exposed to liquidity risk
over time. The subscription business consists
mainly of purchasing and installing solar
systems and batteries at private individuals’
houses, and entering into long term leasing
contracts with these customers (20 years for PV
and 10 years for batteries). With the recently
announced financing package of NOK 250
million in equity and up to EUR 100 million in
debt, the Group’s growth in subscription assets
is secured in the short and medium term. In the
longer term, financing of new customer
contracts may require further debt and equity
financing or a disposal of assets.
Annual Report 2022Page 11
Credit risk
Credit risk is the loss that the Group would suffer if a
counterparty fails to perform its financial obligations.
The Group’s credit risks largely arise from trade
receivables and cash and cash equivalents. The
counterparts for the Group’s cash deposits are large
banks which are considered to be solid. The Group
assesses that there are no material credit risks
associated with these deposits.
Credit risk related to trade receivables is assessed to
be limited due to the high number of customers in the
Group’s customer base and is further mitigated
through the use of credit score providers ahead of
sales, use of prepayments for customers or markets
with higher risk, continuous monitoring of overdue
invoices all combined with the Group holding the right
to reclaim the assets in case of payment default.
An important element of the credit risk profile for the
Group is that the subset of customers addressed are,
as homeowners, already amongst the individuals with
the most robust economy and credit ratings.
According to Intrum, one of Europe’s largest debt
collection agencies, the default probability on a utility
bill is 6 times lower for a customer owning a house
than for customers who are not a homeowner. In
addition, the single point exposure will be low, as the
Group will have thousands of single counterparties
across Europe.
Finally, the solar system contract will be cost saving
for customers in most markets, resulting in the
outcome being worse for the end customer if
choosing not to pay. This element is more prominent
in markets with higher expected loss given defaults
(LGD). I.e. the customer business case is often
stronger in countries where the LGD is higher.
Overall the group considers the financial risks to be
acceptable.
Annual Report 2022Page 11
Annual Report 2022Page 12
Operational risk
Operational risk is the risk that Otovo's planned operations can be negatively impacted due to
failures in internal processes, procedures or instructions, human error, criminal offences or external
events. Within operational risks, examples of scope of control are related to HSEQ measures, roles &
responsibilities, installer concentration, and supply chain management.
HSEQ risks
Within HSEQ risks, examples of areas in scope of control are injuries related to Otovo staff, installers
or customers, material damage to property or equipment, environmental harming, GDPR breach,
loss of personal data or other activities that can harm reputation.
The company has in place HSEQ policies and instructions for IT and handling of personal data. In
addition the employees, installation partners and suppliers are subject to Otovo’s Code of conduct
in order to guide decision-making, and to ensure compliance with internal and external rules and
regulations.
In case of an emergency (event with potential for personal injury or loss of data), an emergency
response group is mobilised responsible for end to end management of the event. The emergency
response group consists of the line manager responsible for the area where the event has been
recorded, the GM in the applicable market, the Otovo HSEQ responsible for duty and the relevant
person from functional management.
Other operational risks
Examples of other operational risks are installer bankruptcies, skewed capacity and constraints in
the supply chain. Installer concentration and supply chain management is measured separately
to ensure timely installation capacity and mitigate such risks. Each country manager is responsible
by delegation to monitor this.
Annual Report 2022Page 13
Otovo’s overall ambition is to become Europe’s number-one provider of solar energy
and batteries to private households. To achieve this, the Company regularly defines
strategic priorities that would bring the company forward on the journey toward
market leadership in Europe. These priorities are endorsed by the Board of Directors
and help define the direction and priorities of the business units.
Strategic Report
During 2022 the strategic priorities have been to build Otovo’s marketplace across 13 European
markets, continue to scale the Subscription business, and start building the next horizon of value
creation, grid services and VPPs.
Marketplace Asset Portfolio Services
Current
focus
Business
model
Solar & battery
marketplace,
charging markup on
installer cost
Portfolio of cash
flow-generating
customer contracts
Selling high-margin
services to grid owners
Key to win
in market
● Relationship with
Originator/
Marketplace delivering
volumes
● Large battery capacity
deployed
● Capabilities in fleet
monetization
1 2 3
● Geographic coverage
● Asset light,
software-driven ops
● Keep developing
balance sheet
● Prove monetization of
portfolio
● Establish contract
and software
capabilities in asset
portfolio
● Bring markets to
profitability
● Keep growing
installation volumes
Progress
X
X
Annual Report 2022Page 14
Building out Otovo’s marketplace is key to
achieving Otovo’s mission of becoming
Europe’s number one provider of solar and
batteries to private homeowners. Building
out the marketplace entails increasing
market share in established markets and
entering new markets.
In established markets, the focus in 2022
has been scaling sales and installations at
low customer acquisition costs. One of the
key enablers has been entering
partnerships with strong local brand and
category leaders that gives Otovo access to
larger customer bases at low cost, while
mutually benefiting the partner, giving them
access to a broader product offering.
Further, Otovo has grown local commercial
teams in order to capitalize on the
significant increase in demand for solar
and battery systems experienced in 2022.
After having launched Poland, Italy, and
Germany in the space of twelve months in
2021, Otovo’s ability to launch markets
swiftly, efficiently, and at a low cost was
strengthened. Therefore, Otovo announced
in February 2022 the intention to accelerate
entry into new markets by launching six new
markets over the next 12 months. In order to
finance this accelerated growth, Otovo
conducted a private placement of EUR 30
million completed on 17 February 2022.
Otovo launched Portugal, the UK, and
Austria during the summer of 2022, before
entering the Netherlands, Belgium, and
Switzerland by the end of the year. All
launches have been successful, having
reached their first sales, active installers on
the platform, and onboarded key initial
hires including the country managers
(“GMs”).
Page 14 Annual Report 2022
The Otovo country-launch playbook is
well-proven and refined over multiple years
of launching European countries. When
selecting to enter a new country, the
recruitment of a local GM commences.
Typically, the GM hired has extensive
experience with other leading platform
companies. Further, Otovo establishes a
local subsidiary, localizes agreements, and
recruits high-quality, vetted installer
partners. With the first installer partners in
place, Otovo starts acquiring customers
and selling solar and batteries. Time from
GM recruitment to the first sale is usually
between three and six months.
When a new market is launched, prices to
customers are set at levels Otovo believes
will be competitive and sustainable over
time. Otovo would therefore deploy lower
gross margins in the initial phase. As Otovo
adds more installer partners to the
platform, this creates a flywheel with lower
cost levels that results in better offers for
the customers. Over time this will lead to
increased gross margin potential for Otovo.
Following the 6 country launches in 2022,
Otovo is now present in 13 European
countries. This manifests Otovo’s position as
Europe’s leading player for solar and
battery installations for private households.
Being the first to reach continental scale in
Europe; Otovo gains volume advantages in
hardware deals; pan-European partnership
opportunities; accelerated subscription
deployment volumes; while reducing
political exposure through country
diversification.
Marketplace: Build out Otovo’s
marketplace across 13 European markets
1
Annual Report 2022Page 15
2 Subscriptions: Continue to scale the Subscription business
Otovo offers subscriptions as an important part of its product offering. Instead of paying the full
installation cost upfront, subscription customers rather pay a monthly fee over 20 years (10 years
for the battery) with no upfront payment. Consequently, the product solves financing for the
consumer as well as reducing other barriers to purchase for the consumer and expands the total
addressable market for Otovo. In addition, subscription customers benefit from a functional
guarantee for the duration of the contract which means that Otovo takes care of maintenance,
repair, and any faulty products.
Otovo’s subscription customers are financed by European Distributed Energy Assets (“EDEA”), which
is owned 100% by Otovo. Otovo and EDEA have entered into an agreement concerning Otovo’s
origination of end-customer subscription agreements, delivery of solar systems and batteries,
maintenance, support, and management services on behalf of EDEA.
Otovo is building a pan-European, high-quality portfolio of cash flow-generating customer
contracts. Otovo has full flexibility when it comes to capitalization strategy, and is devoted to
continue developing its balance sheet while keeping the optionality of portfolio monetization -
either through securitization or a pure sale.
3 Grid services and VPPs: Monetize the flexible
energy assets
In 2022, Otovo accelerated selling batteries to its
customers, continuing to build a large fleet of
battery customers across Europe. These batteries
are valuable flexibility assets for grid owners,
enabling them to balance the grid by storing
excess energy during times of low demand and
releasing it during peak times. By partnering with
Otovo, grid owners can access this flexibility in a
cost-effective way, avoiding the need for
expensive grid upgrades or outages. This not only
benefits grid owners but also helps to reduce
greenhouse gas emissions by enabling more
renewable energy to be integrated into the grid.
Otovo’s grid services and Virtual Power Plant
(VPP) strategy are integral to this mission, as they
enable the company to monetize its fleet of
batteries and create additional value for its
customers. The company's initial focus is to
establish the legal framework and software
capabilities in its asset portfolio to be ready to
launch these services. This will allow Otovo to
offer grid services and VPP capabilities to
customers, helping to optimize their energy
consumption, all while reducing their total energy
costs. By leveraging its large customer base
coupled with its expertise in building tailored
software for solar and battery storage, Otovo is
well-positioned to serve its customers with grid
services and VPP products.
Annual Report 2022Page 16
Otovo considers good corporate governance to
be a prerequisite for value creation,
trustworthiness and for access to capital.
Through Otovo’s corporate governance, the
Board of Directors and Management operate to
ensure confidence in Otovo for our customers,
shareholders, employees and other
stakeholders and to secure value creation over
time.
The governance principles ensure good and
healthy business practices, reliable financial
reporting and an environment of compliance
with legislation and regulations across the
Group. By pursuing the principles of corporate
governance, the Board of Directors and
Management contributes to achieving effective
decision-making based on transparency, open
and clear communication, equal rights for all
shareholders and good control and corporate
governance mechanisms.
Otovo is incorporated and registered in Norway
and is subject to Norwegian law. The Otovo
shares are listed on the mainlist of Oslo Stock
Exchange (Oslo Børs ASA, hereafter “Oslo Børs”).
As a Norwegian public limited liability company
listed on Oslo Børs, Otovo must comply with the
Norwegian Securities Trading Act, Regulation
(EU) 596/2014 on market abuse ("MAR"), the
continuing obligations for companies with
financial instruments listed on Oslo Børs, the
Norwegian Public Limited Companies Act and
other applicable laws and regulations.
Otovo endorses the recommendations of the
The Norwegian Code of Practice for Corporate
Governance issued by the Norwegian Corporate
Governance Board as amended from time to
time (the “Code of Practice”). If the Code of
Practice is deviated from, the deviation is
described and explained in the relevant section
of this statement.
Further, Otovo uses the GRI Sustainability
Reporting Standards (GRI Standards) for
voluntary reporting of sustainable development,
including corporate governance.
Corporate governance
Business
For homeowners, Otovo is the easiest way to get
solar panels on the roof, and batteries in their
home. Otovo is a marketplace that organises
hundreds of local, high-quality, and qualified
energy installers. Otovo uses its proprietary
technology to analyse the potential of any home
and finds the best price and installer for
customers based on an automatic bidding
process between available installers.
Otovo is on the path to becoming number one in
European residential solar. Founded in 2016,
Otovo has rapidly scaled its platform beyond the
Nordics and it is currently operating in thirteen
countries: Norway, Sweden, France, Spain, Poland,
Italy, Germany, Portugal, Austria, the United
Kingdom, Belgium, the Netherlands and
Switzerland. The ultimate vision is to put solar
panels on every roof and batteries in every home
in Europe.
The operations of the Group shall be in
compliance with the business objective set forth
in Otovo's articles of association which reads as
follows: The company's purpose is development,
commercialization and instalment of renewable
energy, as well as to take ownership or provide
business advice related to these business areas.
Strategy
Otovo’s overall ambition is to become Europe’s
number-one provider of solar energy and
batteries to private households.. During 2022 the
strategic priorities have been to build Otovo’s
marketplace across 13 European markets,
continue to scale the Subscription business, and
start building the next horizon of value creation,
grid services and VPPs. .
Annual Report 2022Page 17
Capital structure, equity and dividends
Otovo’s business is financed primarily through
equity, which is the most appropriate funding
source for a company in a scale up phase like
Otovo. The subscription business which is
financed by EDEA, is set up to be partly financed
through bank debt. The board of directors
considers the capitalisation of the Group to be
appropriate relative to its strategy and risk profile.
Otovo is in a growth and scale-up phase, and is
currently not in position to pay dividends. The
company has certain authorisations for capital
increase that have a duration of two years from
the date they were given.
Equal treatment of shareholders and
negotiability
Otovo is committed to equal treatment of
shareholders, and would only deviate from
preemptive rights when it is justified. In February
2022 Otovo raised EUR 30 million through a
private placement in connection with entering six
new countries and investing in organisation,
marketing and technology. Further, in January
2023 Otovo raised EUR 25 million to utilise the
potential of the Company's new debt financing to
finance further growth in the Company’s
subscription business and for other corporate
purposes.
Both private placements represented a deviation
from the shareholders' pre-emptive right to
subscribe for and be allocated the shares in the
offerings.
The Board considered the structure of the equity
raises in light of the equal treatment obligations
under the Norwegian Public Limited Companies
Act, the rules on equal treatment under Oslo
Stock Exchange Rule Book Part II and the Oslo
Stock Exchange's Guidelines on the rule of equal
treatment, and the Board was of the opinion that
the transaction structure was in compliance with
these requirements.
Both share issuance were carried out as private
placements in order for the Company to
complete the equity raise in a manner that was
efficient and with a significantly lower risk and
without the significant discount to the trading
price compared to a rights issue.
The subscription price was in each case set on
the basis of a publicly announced bookbuilding
process and thus reflecting market pricing of the
shares at the time. The latter equity raise was
launched with a minimum price of NOK 19.88 for
up to NOK 200 million according to the
subscription guarantee agreed with the
Company’s largest shareholder AxSol AB to
protect the Company's shareholders against
unexpected results resulting in high dilution.
In both share issuances the Board of Directors
considered conducting subsequent offerings
towards existing shareholders who did not
participate in the private placements, but in both
cases the Company’s shares traded consistently
below the subscription price after the private
placements so that existing shareholders who did
not participate in the private placement could
reduce the dilutive effect by purchasing shares in
the market.
Annual Report 2022Page 18
On this basis, and based on an assessment of the
equity capital markets, the Board considered
both transactions in the common interest of the
Company and its shareholders.
Further, Otovo has in place certain incentive
programmes for employees which imply
deviating from the preferential rights of the
shareholders. The programmes are based on
common market practice and deemed essential
to be able to attract and retain talent and to keep
personnel costs at a sustainable level. All
programmes have been approved by the
general meeting.
There are no restrictions on any party’s ability to
own, trade or vote for the shares in the company.
General meeting
The General Meeting expresses the will of the
shareholders of Otovo and its tasks include
formally appointing the external auditor,
approving the annual accounts, the allocation of
net income, mandating corporate actions
involving shareholders' equity and electing the
members of the Board of Directors and the
Nomination committee.
All of the company’s shareholders are free to
participate in the general meetings, and Otovo
follows market practice, the Code of Practice and
corporate law in relation to general meetings.
Shareholders who are not able to be present at
the general meeting are given the opportunity to
vote by proxy or to participate online unless the
Board of Directors finds that it has reasonable
cause to refuse such online participation.
Governing bodies
The Board of Directors and the Nomination
Committee are elected by the General meeting,
while the Audit Committee and Remuneration
Committee are elected by the Board of Directors
among the Board members. The nomination,
selection and composition of all the governing
bodies take into account the interests of
stakeholders, including shareholders. In addition,
consideration is given to independence and
competencies such as the ability to impact the
organisation, as well as diversity such as age,
gender and citizenship.
See Otovo’s Sustainability Report for further
information about diversity, inclusion and
equality at Otovo.
Board of directors
The Board of Directors of Otovo currently has six
shareholders-elected members and two
employee-elected members. All the
shareholders-elected members are independent
of the executive personnel and three members
are independent of the major shareholders of the
company. The Board of Directors currently
consists of four women and four men, in
accordance with the Company’s policy of
maximum 60 percent gender homogeneity.
See the Board of Directors section for information
on each board member.
The Board of Directors has implemented
instructions for the Board of Directors and the
executive management, including instructions for
election and composition of the Board.
Nomination committee
The Company’s nomination committee was
elected at the extra-ordinary general meeting 9
February 2023 and consists of Thomas Ekman,
CEO of Dustin AB and chairman of the board of
AxSol AB, Otovo’s largest shareholder, and one
independent member Christian Berg, CFO of Wilh.
Wilhelmsen.
The nomination committee shall give
recommendations for the election and
remuneration of Board Members and members
of the nomination committee. The nomination
committee shall have contact with shareholders,
the board of directors and the company’s
executive personnel as part of its work. The
further details of its responsibilities are described
in Otovo's "Mandate for the nomination
committee" that has been adopted by the
general meeting.
As the nomination committee was elected only a
month before it finalised its proposal, information
regarding deadlines for submitting proposals to
the nomination committee was not published.
Otovo will comply with this provision of the Code
of Practice next year.
Annual Report 2022Page 19
Audit committee
The Board of Directors has established an audit
committee, currently consisting of Stine Halla
(chair) and Ingunn Andersen Randa. The audit
committee provides support to the Board of
Directors within the scope of its mandate and in
particular within financial reporting, corporate
governance and risk management. The audit
committee has no decision-making authority
unless the board delegates such authority with
respect to specific issues.
The members of the audit committee are elected
by and amongst the members of the Board of
Directors for a term of up to two years.
The objectives, responsibilities and functions of
the audit committee shall be in compliance with
rules and standards applicable to the Otovo
Group and are described in Otovo's "Mandate for
the audit committee".
Remuneration committee
The Board of Directors has established a
remuneration committee, which is currently
composed of Peter Mellbye (chair) and Johan Erik
Sixten Bergström.
The primary purpose of the remuneration
committee is to assist the Board of Directors in
matters relating to remuneration of the executive
management of the Otovo Group, as well as
reviewing recruitment policies, career planning
and management development plans, and
prepare matters relating to other material
employment issues in respect of the executive
management.
The members of the remuneration committee
are elected by and amongst the members of the
Board of Directors for a term of up to two years
and shall be independent of Otovo's executive
management.
The objectives, responsibilities and functions of
the remuneration committee are described in
Otovo's "Mandate for the remuneration
committee".
Risk management
Risk management is an integral part of Otovo’s
business activities and decisions every day, and
risks are managed and monitored on an ongoing
basis in accordance with Otovo’s risk
management policy. See the Risk management
section for further information.
Board remuneration
The remuneration of the shareholder elected
board members for 2022 will be set forth by the
ordinary general meeting based on proposal
from the nomination committee.
Remuneration to the shareholder elected board
members for 2022 will be determined by the
annual general meeting based on the
recommendation of the nomination committee.
The employee-elected board members receive
ordinary salary from the company.
The remuneration to the board members shall
reflect the responsibility and amount of work they
perform and is not performance based. No
shareholder elected board member has currently
stock options related to the Company’s shares.
The company is in the process of establishing a
board share purchase programme.
Salary and remuneration of executive
personnel
The Company will present a remuneration policy
for leading employees to the annual general
meeting in 2023. Salaries to executive
management are moderate compared with the
general level for executive personnel in Norway.
The Company has in place certain programmes
for share based remuneration. Performance
based salary is capped for each individual, and
no employee can receive more than 50 percent
of its base salary.
Further information about remuneration of the
executive personnel will be included in Otovo’s
Remuneration Report that will be presented to
the annual general meeting.
Annual Report 2022Page 20Page 20 Annual Report 2022
Communication
The Company has in place instructions for handling of
insider information and follows market practice and
rules for listed companies when it comes to disclosure
of financial information as further specified in the
Company’s financial planning and reporting policy. The
company presents its quarterly results in due course
after the end of each quarter. Financial calendars are
public, and shareholders can easily follow the
company on Newsweb and on the investor relations
site investor.otovo.com. Apart from shareholders that
are employees or members of the board, only public
information is communicated to shareholders outside
of the general meeting.
Take-overs
As part of the instructions for the Board of DIrectors, the
Company has in place guiding principles for how it will
act in the event of a take-over bid. The guiding
principles are in line with the Code of Practice.
Auditor
The Board of Directors works to ensure that the auditor
presents the main features of the plan for its work
regarding audits to the board. The auditor participates
in the meeting(s) of the Board where any of the
following topics are on the agenda: the annual
accounts, accounting principles, assessment of any
accounting estimates and matters of importance on
which there has been disagreement between the
auditor and the Management.
The company’s auditor is Roger Telle-Hansen from
BDO. During 2022 the auditor took part in several board
meetings and audit committee meetings. Further, the
auditor had a separate meeting without Management
in the board meeting where the auditor’s report was
presented to the Board of Directors.
The Board of Directors reports the remuneration paid to
the auditor to the shareholders at the Annual General
Meeting.
The Board of Directors reports the remuneration paid to
the auditor to the shareholders at the Annual General
Meeting.
Annual Report 2022Page 21Page 21 Annual Report 2022
Annual Report 2022Page 22
Sustainability in Otovo
Solar energy is winning. It might not be clear every day, but the volume
of weekly installations of panels, inverters and batteries increases, and
over time, they add up, and keep adding up more and more quickly.
And like that, solar takes its place as the dominant energy of the future.
Given that position, solar should be contributing to a future we want. We
are keenly aware of the responsibilities that weigh on us in that regard.
That’s the reason why we invest time and effort into reporting and
disclosing the risks, gaps and areas of improvement. That’s also why we
highlight the gains made in the year that has passed, because every
single new panel on a roof is hundreds of kilowatt hours of fossil fuel
electricity replaced, and every safe, equitable and decent job created is
an improvement to a society where all work isn’t so.
Page 22 Annual Report 2022
Annual Report 2022Page 23
Otovo’s vision is to lead Europe into a
clean, electrified future – by being
the easy, trustworthy and affordable
way to go solar. Our marketplace
connects customers to a network of
local installers around Europe,
enabling climate action through fast
and distributed deployment of
renewable energy solutions. As
energy lies at the heart of sustainable
development, driving the energy
transition is Otovo’s main purpose.
2022 marks a year where limitations
in our current energy system became
painfully clear. European dependency
on imported gas, raging energy
prices, extreme weather events and
forest fires all pointed to an urgent
need for change.
Meanwhile, the world reached one TW
of installed solar power, and while
this milestone took over 20 years,
exponential growth indicates that
capacity will double in only two more.
Mass deployment of renewable
energy will be our future, but it has to
happen now. Solar energy is
unmatched when it comes to
deployment time – with a matter of
only days from customer decision to
renewable power generation.
Renewable energy, and solar power in particular, is key to the
green transition to a low carbon energy future. By removing
barriers to the implementation of solar power for residential
house owners, Otovo is contributing substantially to this
transition. By focusing exclusively on residential solar, Otovo
negates the local environmental harm (biodiversity, landscape
etc.) large-scale renewable energy assets may cause.
From CICERO’s Second Opinion on Otovo’s Green finance framework, 2022
Andreas E. Thorsheim,
CEO and founder
We are graded:
Annual Report 2022Page 24
Introduction
For Otovo, 2022 has been a year of significant growth, with expansion in terms of new countries,
partners, employees, customers, products and installation activities.
Growth can amplify both the positive and negative impacts of Otovo’s activities on the environment,
people and economy, and in Otovo we strive to address actual and potential negative impacts, take
action and embed responsibility through improved ways of working and corporate governance.
This report provides insight into Otovo’s ongoing
work for sustainable development. We have focused
on four areas of material topics;
Each of these topics are highlighted with Otovo’s
approach, 2022 progress and future priorities.
Information in this report applies to the entire
business of the Otovo Group, including our 13
country organisations and the subscription
asset-owning companies in each market, unless
otherwise is explicitly stated.
In 13 cities across Europe, the
employees at Otovo go to work
every day to promote the use of
cleaner energy and increase
chances of avoiding climate
disaster. Demonstrating our efforts
and progress is a point of pride for
us.
Mette Fjelltveit Rye-Larsen,
Head of Sustainability
1. Climate mpact
2. Safe Installations and Healthy Installers
3. Human Rights and Responsible Value Chains
4. Diversity, Inclusion and Equality
Annual Report 2022Page 25
Commitments and governance
In Otovo, we are committed to conduct our business in line with international frameworks and
conventions on fundamental principles and rights in working life and other similar guidelines for the
environment and climate, including: the Universal Declaration of Human Rights (UDHR), International
Labour Organisations’ (ILO) conventions, the UN Guiding Principles on Business and Human Rights
(UNGP, 2011) and the UN Sustainability Goals (SDG). While the 17 SDG’s are interconnected, we focus
our efforts in particular on positive contributions to the following SDGs: Take urgent action to combat
climate change and its impacts (SDG 13), Ensure access to affordable, reliable, sustainable and
modern energy for all (SDG 7), Promote sustained, inclusive and sustainable economic growth, full
and productive employment and decent work for all (SDG 8), and, Ensure sustainable consumption
and production patterns (SDG 12), supported by recognizing the value of strengthening partnerships
to achieve the goals (SDG 17).
Otovo is obliged to fulfil the requirements of the
Norwegian Transparency Act by conducting
due diligence assessments, and to account for
these publicly, in line with OECD Due Diligence
Guidance for Responsible Business Conduct.
in February 2022, Otovo became a member of
the UN Global Compact. We support the Ten
Principles on human rights, labour, environment
and anti-corruption, and are committed to
make them a part of our strategy, culture and
day to day operations. In 2023 Otovo will report
on progress (Communication on Progress, CoP)
for the first time, in accordance with the
membership requirements.
The Board of Directors has the overall
responsibility for Otovo’s governance and
compliance with ESG requirements and targets.
The main principles for Otovo’s approach to
sustainability are set forth in the Group’s
sustainability policy, which interlinks with the
human rights policy, anti-corruption policy and
anti-discrimination policy. Further, the Group
has recently established a code of conduct for
suppliers and business partners setting forth
the principles we expect our partners to adhere
to. Otovo’s board of directors reviews the
ongoing work related to sustainability on an
annual basis.
Annual Report 2022Page 26Page 26 Annual Report 2022
Otovo’s activities and value chain
in 13 countries in Europe; Norway, Sweden, France, Spain, Poland, Italy,
Germany, Portugal, UK, Austria, Belgium, Switzerland and the
Netherlands. The latter six countries were entered into in 2022. Each
country’s operations is led by a general manager and supported by a
local sales, marketing, customer support, project management and
account management (installer relations) team. Countries are
organised in clusters led by a managing director. Otovo’s
headquarter is located in Oslo, Norway, and consists of executive
management, finance, legal, delivery and product teams.
By entering their home address in the Otovo webshop, customers
obtain proposed designs and prices for solar systems in real-time,
based on automated offers from Otovo's network of local, reliable
installers. Customers can choose between purchasing the solar and
battery installations directly or entering into a 20 year subscription
agreement (10 years for batteries).
Annual Report 2022Page 27
Key suppliers and business partners
For a marketplace company like Otovo, it is
crucial to have strong relationships with
suppliers and business partners to remain
competitive, ensure a reliable supply of
products and services, foster innovation,
mitigate risks and promote sustainable
development. A selection of Otovo’s key
business partners are highlighted below.
Installation partners
Over 700 installer companies have signed up
and made themselves available for work on the
Otovo platform. The installation partners deliver
turnkey solar and battery installations that we
sell to our customers. In Otovo’s digital software,
the installer companies provide cost of labour,
hardware and transport, define hardware
offering and geographic area of operation, so
that we can offer real time prices to our
customers. Otovo acquires customer photo
documentation and information to eliminate
the necessity of costly pre-installation
inspections. Project planning, execution and
completion is documented within the software,
supported by Otovo’s local teams of project
managers. Installer companies are recruited,
onboarded and supported by local account
managers.
Supply chain distribution partners
As Otovo purchases turnkey installations from
our installation partners, the supply chain is
outsourced. Otovo’s sales and delivery volumes
are typically greater than those of each
individual installation partner. To create
attractive benefits for our installation partners
Otovo signs framework agreements with a
number of distribution partners in each country.
The benefits range from ensuring better prices,
better credit lines and payment terms, to
securing prioritised delivery in times of
shortage. Future plans include conducting
co-branded training sessions for installers to
increase capacity and capability in the industry.
Solar hardware manufacturers
The main components of a solar system are
silicon photovoltaic (PV) modules, inverter(s),
cabling and switches and the aluminium or
steel mounting structure. Some solar systems
also include DC optimizers, batteries, smart
meters, and/or batteries only. While Otovo
purchases turnkey installations, including
hardware, from our installation partners, only a
limited selection of hardware components are
placed on a whitelist and approved for use in
Otovo projects.
In Otovo’s Whitelisting approach, we set
requirements for technology, product quality,
manufacturer financial solidity and sustainable
manufacturing practices, to ensure that only
the best solar hardware is installed on and in
our customers' roofs and homes.
Hardware manufacturers are located across
the globe, with a majority in Asia. Otovo
engages directly with hardware manufacturers
and conducts risk based due diligence
assessments to promote responsible sourcing
and implement mitigating actions where
necessary.
Demand (sale and lead) partnerships
Otovo partners with leading
business-to-consumer oriented companies
across Europe, to increase demand and
strengthen our brand. By collaborating with
selected partners in sectors like utilities, retail,
real estate, and finance, we can reach their
interested customers with our solar proposition.
Our partners receive commissions or financial
incentives, like discounts for their customers. In
2022, net sales from partnerships accounted for
over 10% of Otovo's total. The added benefit for
our partners include the ability to promote a
sustainable service.
Annual Report 2022Page 28
Materiality Determination
Like Otovo’s growth trajectory, our stakeholders' emphasis on sustainable development has also
evolved in 2022, with higher expectations for Otovo’s ability to demonstrate action and
transparency. To address this, Otovo has decided to adopt the Global Reporting Initiative (GRI)
framework, which provides a set of reporting standards that help businesses understand and
communicate their impact on sustainability.
In accordance with GRI, Otovo has conducted impact assessments through conversations and
surveys with key stakeholders, including investors, supply chain distribution partners, installers,
customers, industry associations and employees. Details regarding our ongoing stakeholder
discussions are summarised in Appendix C: Stakeholder Engagement. See Appendix A for GRI Index.
Based on the stakeholder discussions we have decided to focus on the following material topics:
● Climate Impact
Emissions from our entire value chain, emission intensity, avoided emissions
● Safe Installations and Healthy Installers
Injuries and accidents during installations of solar panels and batteries
● Human Rights and Responsible Value Chains
Human and labour rights violations in our entire value chain
● Diversity, Equality and Inclusion
Discrimination, inequality, harassment in the workplace
Annual Report 2022Page 29
Climate Impact
Materiality
The energy sector is a major contributor to
global greenhouse gas (GHG) emissions and
transitioning to low carbon energy sources and
technologies are fundamental to slow down
climate change. By providing an easy,
affordable and trustworthy way to go solar, we
enable people to make a positive climate
impact, while saving money on their electricity
bills.
After installed, solar panels reliably generate
electricity with zero emissions, for at least 30
years. For comparison, one would have to burn
4.5 tonnes of coal, emitting 9 tonnes of CO2, to
match the lifetime production of just a single
solar panel on an average European rooftop
1
. In
addition, rooftop-mounted solar panels utilise
urban spaces, leaving valuable land and
ecosystems undisturbed.
Otovo nonetheless contributes to GHG
emissions in the present through our business
activities, like air travel, purchase of office
electronics, commuting, electricity
consumption, transport to installation sites and
in our hardware supply chain, with emissions
from shipping and manufacturing of the solar
system hardware.
Measuring GHG emissions is important because
it helps us understand the scale and sources of
our emissions and establish a baselines to set
targets and track progress towards reducing
emissions.
1) Based on a 400W panel with avg annual yield of 944 kWh/kWp, 30 year lifetime, and emission intensity of
800 gCO2/kwh for coal fired power plants.
2) Available at investor.otovo.com
Our approach
Since Otovo started considering the scope and
scale of our GHG emissions in 2019, and
reported on it in the Annual Report for 2021, we
have strived to include emissions from our
entire value chain. Reporting on indirect
emissions (Scope 3) involves collecting data
from a wide variety of sources, maintenance of
emission factors and dependency on
manufacturers to conduct and provide
documentation on life cycle assessments of
their products.
Entering six new countries in 2022, introducing
new product categories in several countries, like
batteries and smart meters, and doubling the
volume of installations, inevitably added to the
GHG accounting complexity.
In 2022, our focus has been to improve our way
of working, and to enable Otovo to set a
baseline and emission reduction targets for
future years. We have moved GHG reporting
from spreadsheets to the carbon footprint
module from software provider and protocol
expert CEMAsys, and introduced new emission
categories like end of life treatment of solar
system hardware. Additional details on GHG
accounting is given in Appendix B.
Reporting on GHG emissions is owned by the
Head of Sustainability and supported by
dedicated employees responsible for data
collection and the General Managers in each
Otovo market. Our principles are aligned with
the UN Sustainability Goals, as embedded in our
Sustainability Policy
2
.
Annual Report 2022Page 30
We work to minimise the environmental footprint and maximise the positive impact of our
business by:
● Delivering high quality solar systems, with long product lifetimes.
● Delivering high performing solar systems, with optimised energy production.
● Minimising material and energy use in our activities and operations.
● Developing software to eliminate unnecessary resource use and optimise installation
transport logistics.
● Minimising carbon intensive activities, like air travel and meat consumption.
● Disposing of waste safely and responsibly.
● Contributing to increased circularity in the solar value chain, e.g. by enabling complete
collection and correct handling of hardware reaching end of life.
● Considering the environmental footprint related to hardware manufacturing and transport
when making decisions on what to distribute and promote through our platform.
● Avoiding purchase of waste generating company merchandise.
● Using certified textile for company garments.
● Offsetting emissions we are not able to reduce.
Annual Report 2022Page 31
Status 2022
In 2022, more than 7300 households became powered by the sun through an Otovo installation,
collectively adding 46.8 megawatts of solar capacity to their homes in the European power grid. With
average annual yields
3
of 945 kilowatt hours per kilowatt, these systems will generate 1.33 billion
kilowatt hours (1.33 TWh) of clean energy during the next 30 years.
While more than 9500 customers made the decision to go solar through the purchase of an Otovo
solar system, we calculate and account for climate impact when the systems are operational, not
when they are sold. Therefore, only installed projects are included in the presented data.
Avoided emissions
When a solar system starts operating, it
generates emission-free electricity for 30
years or more. By replacing power generation
from fossil fuels, like coal and gas, emissions
from these sources are avoided. We quantify
the avoided emissions using the European
Attribute Mix
4
(EAM), which represents the
surplus of power in the European grid that is
sold without guarantees of origin. In 2021 the
EAM was 442.66 kgCO2/kWh.
Using this methodology, we apply current
knowledge of the electricity mix to predict
avoided emissions 30 years into the future. As
new data for the EAM is published annually, we
make adjustments for the remaining years of all
solar systems accordingly. We emphasise that
this comparative impact is not directly
equivalent to changes in the amount of GHGs
emitted into the atmosphere.
3) Year 1 yield is calculated at each system location, average annual yield includes 0.7% linear degradation over time.
Fig 1: Installed Capacity (MWp)
Fig 2: Avoided emissions (ktCO2e)
102.8
22.6
872
2020
46.8
Avg yield
(kWh/kWp)
968
945
2021 2022 All time
(2016-2022)
11.0
2020
0.6
2021 2022 All time
(2016-2022)
1.2
0.3
0.1
46.8 MW
Installed PV Capacity
945 kWh/kWp
Average yield
1.33 TWh
Lifetime Production
Annual Report 2022Page 32
GHG Emissions and intensity
Category Unit 2021 2022
Direct Emissions (Scope 1) tCO2e 0 0
Electricity Indirect Emissions (Scope 2) tCO2e 42 56
Indirect Emissions (Scope 3) tCO2e 22 918 48 741
Otovo Activities
Installer Transport
Solar System Hardware
125
292
22 458
338
509
47 895
Emissions Intensity Thousand tCO2/MW
Installed
1.01 1.04
Emissions Intensity Thousand tCO2/MEUR
Revenue
0.82 0.77
Lifetime footprint
Incl battery installations
gCO2/kWh 35 37
GHG emissions and intensity
Emissions from Otovo’s own activities expectedly increased in 2022, much related to the launch of
six new markets, involving employees travelling from various Otovo offices for training and
onboarding, and purchase of office electronics and setups.
The emission intensity per MW installed PV capacity increased partially due to the introduction of
new emission categories, including end of life treatment, but primarily due to a higher battery
attachment rate. While battery storage does not increase the electricity production generated by a
system, it allows for a higher rate of self-consumption, larger systems in areas with low feed-in
tariffs and other benefits for the customer, and in the future for the grid. In 2022, Otovo delivered
10.5 MWh of storage capacity.
4) https://www.aib-net.org/facts/european-residual-mix (February 9, 2023)
47 895
509
338
Fig 3b: Scope 3 Emissions, 2022 (tCO2e)
Solar
system
hardware
Installer
transport
Otovo
activities
Fig 3a: Total GHG Emissions, 2022 (tCO2e)
48 741
56
0
Scope 3Scope 2Scope 1
Annual Report 2022Page 33
Net Impact
Comparing the emissions from Otovo’s entire
value chain (scope 1-3) with the emissions from
electricity these systems replace through their
lifetime, illustrates the significant positive
impact of solar energy (fig 4). The carbon
payback time, i.e. the time it takes for the
negative environmental impact of deploying
the system, from manufacturing to installation,
to be offset by the positive environmental
impact of clean energy production, was 2.5
years for systems delivered in 2022.
Carbon offsetting
Carbon offsetting is the purchase of carbon
credits, which represents a certified reduction or
removal of one tonne of carbon dioxide
equivalents (tCO2e) from the atmosphere. We
offset emissions directly related to Otovo’s
operations and our employees’ activities by
purchasing carbon credits. This includes office
energy consumption (scope 2) and employee
commuting, business travel, electronic office
supplies and office waste (scope 3). In 2022
Otovo offset 394 tCO2e through The UN Carbon
offset platform
5
.
5) https://offset.climateneutralnow.org/
Priorities in 2023
● Set and communicate our target for emission reduction
in accordance with the Science Based Targets Initiative
(SBTi), the process has been initiated.
● Conduct a project to assess solar hardware circularity
and correct handling of hardware reaching end of life.
● Continue developing and strategizing on environmental
factors like lead content and cradle to gate
certifications.
Fig 4: Net impact 2022 (tCO2e)
538 968
48 798
Net impactAvoided
emissions
Emissions
587 766
Annual Report 2022Page 34
Safe Installations and Healthy Installers
Materiality
In Otovo we are committed to ensure a safe and sustainable working environment, to prevent
accidents and to be a workplace without injury or harm. The installation process is Otovo’s business
activity that has the highest Health, Safety and Environment (HSE) risk both in terms of potential
impact from an incident and likelihood of an incident occurring. Therefore, occupational health and
safety is a material topic for Otovo, with special emphasis on installation activities and the people
performing them.
Our Head of HSEQ, whose role and specified
area of responsibility was introduced in 2022, is
in charge of maintaining and developing our
HSEQ-policy, and implementing training and
responsibility in all markets, to enable risk
mitigation and meet the requirements to deliver
according to our values and stakeholder
expectations. This task can not be performed
without close cooperation with our employees
and contractors. The General Managers oversee
this policy in their respective markets in
cooperation with the Head of HSEQ.
Our approach
Anyone working at and for Otovo must comply
with our Health, safety, environment and quality
(HSEQ) policies. The majority of Otovo’s HSEQ
resources are allocated towards the solar
system installation process. The main risks of
personal harm are associated with falling from
heights, falling objects, exposure to electrical
voltage, stress injuries and traffic related
incidents.
If an accident or breach of policy occurs,
installers shall immediately report this to Otovo,
but it can also be reported by the customer or a
bystander, inspector or identified by Otovo
through on site visits or photo verification.
Incidents can be reported directly to local Otovo
project managers, account managers or to the
General Manager, subsequently handled and
escalated in accordance with the HSEQ policy.
In situations where these channels are not
experienced to be sufficient, we encourage
employees, suppliers and others who have a
relationship with the company to use our
Whistleblowing Channel.
Third party inspections on site are conducted
through renowned partners, to promote a safe
work environment. HSE inspections take place
during the installation process and may be
conducted with or without notice.
Annual Report 2022Page 35
Our principles are aligned with the UN SDGs and further embedded in our Sustainability Policy
6
:
6) Otovo’s Sustainability Policy is available at investor.otovo.com
We are committed to maintaining a sustainable installer ecosystem and being their preferred
partner by:
● Maintaining a safe and injury free working environment, through systematic HSE practices
and frequently conducted third party inspections.
● Providing clear ethical guidelines and compliance requirements through our HSEQ
requirements and the Code of Conduct for Suppliers and Business Partners.
● Conducting thorough due diligence upon onboarding installation partners, and thereafter
on an annual basis, mitigating identified risks, e.g. undeclared work and social dumping.
● Providing and continuously improving a strong digital service with excellent user
experience for efficient handling of project pricing, planning and documentation.
● Providing increased predictability on order volume and reduced financial risk.
● Create favourable conditions and attractive benefits, e.g. economies of scale, through
distributor partnerships serving our installers.
Annual Report 2022Page 36
Status 2022
Health and safety events
When an HSEQ event is reported to Otovo it is
classified in accordance with the following
matrix:
HSEQ Classification Matrix
Category Description
1
Breach of HSEQ requirements
(no risk of damage or injury)
2
Event with damage to property or
equipment
3 Event with potential personal injury
4 Event with personal injury
5 Event with potential loss of life
6 Event with loss of life
Events in category 3 and higher are reported on
specifically. In 2022, 22 incidents and accidents
affecting health and safety were reported to
Otovo from internal or external sources. Three
incidents were classified with high severity
(category 4) and nineteen with potential risk of
personal injury (category 3).
Three incidents with personal injury
(category 4):
● One accident with serious personal injury,
where an installer suffered fractures in both
feet after falling from the roof, upon
switching connection to safety line, no
backup line was used. Police involved.
● One accident with personal injury, where an
installer suffered abrasions after falling from
the scaffolding.
● One accident with minimal personal injury,
but classified as severe as it involved a
customer being exposed to electric current
upon touching the gutter of hens house,
caused by a pinched cable.
Including only the events related to installers
above (2), this represents approximately 7.5
injuries resulting in work absence per million
work hours.
Nineteen incidents with potential personal
injury (category 3):
● One accident involved an installer slipping
from a wet ladder, without serious injury.
● Sixteen incidents involved observations of
installers not wearing correct or sufficient
safety equipment, but without injury or
accident.
● One incident involved unauthorised
personnel participating in the installation,
without injury or accident.
● One incident involved unacceptable/unsafe
behaviour without injury or accident.
All events were investigated, and mitigative
actions implemented.
One installer company was offboarded and
their contract terminated. Our efforts to achieve
zero injuries will continue and improvement
measures are on our agenda in 2023.
Fig 5: Events and injuries per 1000 installations
2022
2021
2.58
2.13
0.41
1.06
Potential injury events
#per 1k installations
Injuries
#per 1k installations
Annual Report 2022Page 37
Inspections
Otovo’s third party inspection partners
conducted 205 inspections in total, covering
2,8% of installations. One of the improvement
potentials that we found in this process was
about providing more structured feedback to
the installer companies, based on the third
party reports. It’s now standardised in our new
inspection policy.
Improvement initiatives
Policy review and updates
In September 2022, we hired a dedicated Head
of HSEQ and commenced a review of our HSEQ
policy, which improvement suggestions were
approved by the Company's Executive
Management in February 2023. The primary
goal of the review was to align our policies with
the new reality of operating in 13 countries,
including six new markets added in 2022. The
objective was to enhance the effectiveness and
assertiveness of our HSE-related routines and
standards. All markets were actively involved in
the review process, and the necessary changes
will be implemented in the first half of 2023.
Some of these improvements include:
● Updated Inspection policy, including
specifications on selection, frequency and
follow up procedure.
● Introduction of electronic resources to carry
out third party inspections.
● Frequent “HSE best practice” sharing
sessions.
● Internal reviews of the local HSEQ-reviews
concerning content and adapting to the
existing company structure.
● Implementation of a HSEQ-software
management system.
Internal training programme
In October 2022, Otovo launched an enhanced
HSEQ classroom training program targeted at
General Managers, Head of Operations, Account
Managers, and Project Managers across all
Otovo markets. The primary objective of this
training is to ensure that all 13 markets receive
consistent and fundamental HSEQ education
while equipping key personnel with a thorough
understanding of Otovo's HSEQ policy and tools.
Priorities in 2023
● Conduct classroom training with key
personnel in all locations.
● Implement our new inspection policy, and
carry out inspections of 3% of all installations.
● Implement new and improved digital
support for HSEQ processes and activities
across the organisation.
● Establish a maturity matrix to benchmark our
markets.
Annual Report 2022Page 38
Human Rights and Responsible Value Chains
Materiality
Otovo’s value chain spans from raw material
extraction, refinery, manufacturing and shipping
of solar system hardware, to local installation
activities, in addition to providers of software,
office electronics and other supporting services,
involving workers and societies in many
countries around the world. Through our
activities, suppliers and business relationships,
Otovo has an impact on the broader society
and environment. We prioritise ensuring that
this influence is constructive and favourable,
while actively seeking to reduce or eliminate
any negative impacts.
Renewables like solar and wind are the power of
the future, central to mitigating extensive
negative impacts of climate change on human
societies. The swift and massive transformation
of the world’s energy system depends on a
massive workforce deployment. The future
energy system should be held to higher
standards than the present energy system, and
it is key that renewable energy jobs are decent
jobs. Otovo and the industry will work to address
worries and risks.
National authorities are responsible for
protecting human rights through legislation, but
companies, including Otovo also, have a
responsibility to promote and respect
international human rights conventions,
especially if and when operating in high-risk
regions and in countries where such
conventions are not adopted or are poorly
enforced.
Otovo fulfils the requirements of the Norwegian
Transparency Act by conducting human rights
due diligence assessments and to account for
these publicly. In the following sections we
describe our ongoing work and account for the
due diligence assessments in accordance with
the Transparency Act §4 and §5.
Our approach
Otovo is committed to respecting
internationally recognised human rights,
including the Universal Declaration of Human
Rights and ILO Declaration on Fundamental
Principles and Rights at Work, in our operations,
our value chain, and in the communities where
we or our business partners operate. Please
refer to the introductory section Otovo’s
Activities & Value Chain for a description of our
organisation and business relations.
Following the Transparency Act that entered
into force in July 2022, Otovo has adjusted its
approach to human rights in line with the
OECD’s Guidelines for Responsible Business
Conduct. Otovo’s commitments are embedded
in our new Policy for Human Rights and
Responsible Business Conduct, and we set
forward expectations and requirements in our
Code of Conduct for Suppliers and Business
Partners
7
.
7) Available at investor.otovo.com
Annual Report 2022Page 39
Oversight and responsibility for Otovo’s due
diligence assessments ultimately lies with the
Executive Management, which receives and
reviews reports on risk assessments, due
diligence activities and progress annually. The
Head of Sustainability has the responsibility for
developing and supervising procedures and
policies, ensuring appropriate employee
training, and implementing relevant measures.
Category Managers, including the VP Supply
Chain, Head of Technology, VP Partnerships and
Chief Product Officer, are responsible for due
diligence assessments related to geographic
risks, input factors and suppliers being
conducted on an ongoing basis.
At Otovo, we acknowledge that the process of
conducting human rights due diligence is an
ongoing and dynamic activity that must be
performed regularly.. This is Otovo’s first report
after the Norwegian Transparency Act entered
into force, and we remain committed to
regularly reviewing and updating our policies
and practices to ensure that we are
continuously improving our approach to human
rights. Otovo will implement suited measures
and communicate with stakeholders if negative
consequences of its business are detected.
Otovo will also provide for or cooperate in
remediation where this is required.
Information inquiries, grievance and
whistleblowing
For inquiries related to how Otovo works with
due diligence and responsible business
conduct, we ask stakeholders to reach out to us
through sustainability@otovo.com.
In case of concerns or suspicion of
objectionable conditions, we encourage any
stakeholder of Otovo to inform us through a
local contact person or use our Whistleblowing
Channel in situations where the regular
reporting lines are not experienced or expected
to be sufficient.
Status 2022
In 2022, our work on human rights was initiated
with a gap analysis of our current practices,
including our approach to approving and
whitelisting manufacturers and hardware, and
our requirements and framework agreements
with installers and distribution partners. We
created a high level mapping of our supply
chain and business activities, identifying
sectors, manufacturing steps, input factors and
geographies. We based our initial assessment
of potential exposure to human and labour
rights violations and the subsequent actions on
reputable sources such as the Global Rights
Index from the International Trade Union
Confederation, the Corruption Perception Index
from Transparency International, the List of
Goods from the US Department of Labor's
International Labor Affairs Bureau, and other
sources such as solar industry-specific
publications.
Identified risks
In our initial risk assessment, we have
established an overview of potential violations
of human and workers rights in our supply chain
and amongst business partners based on the
following parameters:
As an outcome of the assessment, the following
areas were identified as key risks for Otovo;
Severity:
● Scope: Gravity of abuse
● Scale: The number of people likely to be
affected by abuse
● Irremediability: To what level can the
impacted person(s) be restored to their
prior enjoyments of the right(s)
Likelihood: The likelihood of the human
rights abuse to occur
Annual Report 2022Page 40
PV modules: Risk of forced labour practices in the solar supply chain
PV modules used in Otovo projects are subject to a due diligence review through Otovo’s specific
whitelisting process, where both the manufacturer and the products are pre-approved. Otovo also
collaborates with distributors in each country to obtain information about the products we intend to
use, and we also have direct contact with the manufacturers.
Production of solar system hardware involves labour intensive industry sectors like the mining and
manufacturing industry, historically prone to labour and human rights violations, and while the
manufacturers of the PV modules are known, the information about producers of upstream input
factors is often not available.
There are reports that the manufacturing of PV modules is connected to labour and human rights
violations. Reports on Chinese government oppression of muslim minorities in the Xinjiang Uyghur
Autonomous Region are grave concerns for the solar industry. While all production steps and
factories from raw materials to modules ready for shipping are potentially exposed, solar-grade
polysilicon manufacturing is the solar supply chain’s most significant exposure to the Xinjiang region,
as Chinese production based in Xinjiang operates 40-50% of the world’s production capacity.
Raw Materials Polysilicon Ingots Wafers Cells Modules
Polysilicon and other input factors exported from the Xinjiang region have the potential of
contaminating the supply chain in all parts of the world, as low traceability makes it difficult to
ascertain its origin. Poor traceability of product components and raw materials are therefore
considered a notable risk for Otovo.
Batteries: Mining of conflict minerals
Markets and practices surrounding the
extraction and refining of battery inputs, like
cobalt, as well as product assembly, are
complex and it is difficult to ascertain their
origin. Therefore, Otovo has taken the decision
to refrain from providing batteries containing
cobalt, as we consider the risk of exposure too
high and alternative technologies are available
in the market.
Lack of traceability of raw materials in general is
still an issue that Otovo considers a salient risk
and we work continuously with the issues
related to this that we can control.
Installation activities: War in Ukraine and people
displacements
Geopolitical instability and societal factors, may
on a general basis increase the risk of
deteriorating working conditions through long
working hours, unpaid overtime, incidents of
forced labour, lack of health and safety
measures, and corruption. Therefore, Otovo
follows up our installation partners closely to
cease, prevent and mitigate adverse impacts.
While we have not uncovered any of these
effects within our installer base in 2022, the
scope is potentially high, and will in the future
be a focus area for Otovo.
Annual Report 2022Page 41
Initiated activities and measures
Updated due diligence and social risk score
In 2022, we extended our hardware whitelisting
process, to include a social risk score. We have
been in dialogue with all manufacturers on our
whitelist and requested information about their
practices to protect labour and human rights
within their own company and their supply
chains, including documentation on their
Human Rights Policy, Code of Conduct for
Suppliers and to ascertain, whether they are
members of the UN Global Compact. Valid
certification on Occupational Health and Safety
Management Systems (ISO 45001) is a
prerequisite for being whitelisted. One
manufacturer was not responsive and removed
from our whitelist.
Risk Mitigation Strategy Update
Otovo’s Whitelist currently includes PV modules
from 11 module manufacturers. Our assessment
of the remaining whitelisted manufacturers
yielded satisfactory results in terms of
governance frameworks and commitments,
and none were found to own and operate
factories in the Xinjiang region. Exposure
through raw materials and upstream input
factors remain a prioritised concern. Due
diligence, including full mapping of
manufacturing locations, sub-suppliers,
potential factory audits and follow ups, is
complex and the scope unlikely to get smaller.
Our updated sourcing and whitelisting strategy
entails a reduction of whitelisted
manufacturers, to focus on a selection of core
brands. This will enable more of Otovo’s internal
resources to be allocated at each individual
manufacturer, as well as, increase our volume
and “purchasing power“ towards the selected
brands, incentivising commitment and
cooperation.
Otovo’s main priority and concentrated efforts
has, and will continue to be, to assess how the
manufacturers we select for Otovo projects
work to protect human rights in their own
company and supply chains, and to take action
to de-list companies not actively working to
mitigate exposure to violations.
We will further work to increase our share of
hardware manufactured in Europe. While the
volume of available hardware manufactured in
Europe, especially PV modules, is currently
limited, several initiatives are working to move
more of the solar supply chain to Europe.
Challenging Chinese supply chain dominance
and enforcing policies are necessary for a
healthy development of our industry,
addressing both human rights issues and the
GHG intensity of hardware manufacturing.
Cooperation with industry association and other
companies
Otovo takes part in the Norwegian Solar Energy
cluster working group “Ethical Value Chains”,
where several companies in the Norwegian
Solar industry are participating. While
developing and implementing ethical
guidelines and due diligence procedures,
individual companies have limited impact on
correcting systemic issues. The issue of human
rights violations in the solar supply chain needs
to be addressed through government initiatives,
policies and requirements, and through
cooperation.
Priorities in 2023
● Get all partners, including whitelisted
manufacturers, installers, dIstribution
partners and demand partners, to state their
commitment to our Code of Conduct.
● Work to establish representation of affected
stakeholders.
● Reduce portfolio of Whitelisted
manufacturers according to strategy.
● Increase portfolio of hardware
manufactured in Europe.
Annual Report 2022Page 42
Materiality
At Otovo, we believe that tackling the energy transition requires innovative and creative problem
solving approaches, driven by a diversity of perspectives, experiences and skill sets.
Otovo has made significant progress in 2022 supporting Diversity, Equality and Inclusion (DE&I).
However, being a fast growing scaleup, with employees and leadership across thirteen country
organisations, ranging from relatively mature to recently established, in addition to a central team
and certain remote workers, involves a variety of potential risks to employment diversity, equality
and inclusion. Homogenous leadership when establishing new country organisations, unconscious
biases affecting hiring and unclear for talent development are all areas that need to be actively
addressed to ensure that Otovo has a thriving workforce, fit to meet the needs of our collective
mission and the individual.
Otovo is obligated to carry out activities to promote equality and prevent discrimination, to report on
these activities and the actual status of gender equality, in accordance with with the Norwegian
Equality and Anti-Discrimination act.
Diversity, Equality and Inclusion
Annual Report 2022Page 43
Our approach
We strive to create a workplace culture that values, supports and promotes Diversity, Equality and
Inclusion (DE&I), where employees feel valued, respected and able to contribute their talents,
perspectives, and experiences.
Otovo’s commitment to work actively, purposefully and systematically to promote gender equality
and prevent discrimination in the workplace, are embedded in our internal Anti-Discrimination and
Equality policy. While the ultimate oversight and responsibility for implementation of improvement
measures lies with the CEO, the VP People, supported by the Head of Sustainability, are responsible
for planning and carrying out our yearly activities and assessments. Otovo’s Working Environment
Committee (WEC) is regularly involved to measure and report on progress, make recommendations
and hold leadership accountable for making progress on DE&I targets and initiatives.
Our principles are aligned with the UN Global Compact Principle 6, Sustainable Development Goal 5
and the Norwegian Equality and Anti-Discrimination Act:
Anti-Discrimination:
We do not accept any discrimination based on personal identity such as gender, ethnicity,
religion, gender identity, sexual orientation, age or disability. We do not discriminate based on
pregnancy, parental leave at birth and adoption, or care responsibilities.
We will work to prevent discrimination by evaluating if and how it may occur with respect to
work related activities, like: recruitment; remuneration, working conditions; opportunities for
promotion and development; and combining work and family life.
Gender Equality:
We promote equality, giving people equal opportunity and equal rights. We practise equal
pay for work of equal value.. We recognise that accessibility and facilitation are a prerequisite
for equality.
We are committed to being a company with:
● Equal participation in decision making, with maximum:
● Less than 60% gender homogeneity in managerial positions
● Less than 60% gender homogeneity executive management positions
● Less than 60% gender homogeneity in the Board of Directors
● Equal pay for equal work
● Equal opportunities
No Harassment:
In Otovo every employee, customer and partner is to be treated with dignity, kindness and
respect. We have a zero tolerance for harrasment, and sexual harassment.
Annual Report 2022Page 44
Status 2022
In 2022, the Otovo Group workforce grew by
80%, joined by new Otovistas in both new and
established offices. We have conducted a
company-wide DE&I risk assessment, followed
by a DE&I maturity assessment. Findings were
presented and discussed in the Working
Environment Committee and measures
planned and implemented to address our
findings.
Risks and awareness survey
All employees with management and hiring
responsibilities were involved in assessing risks
for discrimination and impediments to equality
in Otovo, with special emphasis on recruitment
and hiring activities, and career development
opportunities. The assessment was carried out
through a survey, and the results were
presented and discussed in the Working
Environment Committee, resulting in a defined
action plan. Key findings are presented below.
Findings
The majority of Otovo’s offices have more than
60% gender homogeneity, which is in breach of
our targets. Within key functional roles, there is a
predominance of gender within certain
functional areas, including, a disproportionate
number of male employees within sales
functions, and in some offices a
disproportionate number of female employees
within the account management functions. The
feedback pointed to one possible source of
explanation, that in some regions, job
advertisements lack inclusive language related
to diversity.
Feedback also indicated the need for more
clearly defined career development pathways
leading to, promotion, rotation and/or
advancement opportunities. As well as a need
to advertise internal vacancies more openly to
increase awareness to further support career
development, rotation and progression
opportunities for employees.
Maturity assessment
Otovo carried out an organisational DE&I
maturity assessment, adapted from the Korn
Ferry D&I Maturity Model Sequence (Korn Ferry,
2021). The assessment helped gauge Otovo’s
maturity levels, ranging from basic to leading
edge, on the five dimensions; Risk Management,
Awareness, Talent Integration, Operations
Integrations and Market Integrations.
The dimensions focused on:
● to what extent Otovo has the infrastructure in
place to mitigate and prevent DE&I related
risks,
● to what extent an organisation's leaders and
employees are committed to the value of
D&I and build awareness around it,
● to what extent an organisation has
integrated diversity and inclusion into their
talent systems,
● establishment of DE&I actions in operations
to promote greater efficiencies, increased
safety and quality assurance, and
● the top line impact that DE&I measures have
through expanding to markets of new
consumers, providing enhanced customer
service and effective partnerships within
communities.
Annual Report 2022Page 45
Risk management
To support Otovo’s compliance efforts, several
policies, and guidelines have been established
and communicated during 2022.
Our Anti-discrimination and Equality Policy,
emphasises equality and the prevention of
discrimination on a number of protected
grounds including sex, ethnicity, nationality,
religion, national origin, gender identity, gender
expression, age or disability.
Otovo´s Whistleblowing and Complaints Policy
also supports Otovo´s DE&I compliance goals
by providing employees with avenues to make
formal complaints in the event of a violation of
a protected ground outlined within the
Anti-discrimination and Equality Policy as well
as within local legislation. This policy provides a
reporting avenue without the fear of reprisal.
Otovo also initiated the development of
Non-Bias Recruitment Guidelines to support
inclusive hiring efforts related to sourcing,
screening, interviewing and establishment of
employee compensation.
Awareness
Otovo strived to communicate advocacy and
support of DE&I through various communication
channels. Otovo´s leadership continuously
shared support and messaging of our
commitment to DE&I through internal
communications and within company wide
town hall meetings, as well as, through efforts
focused on communicating to hiring managers
the goal of increasing gender equality in hiring
of qualified females within leadership positions.
As well, as part of Otovo’s 2022 employee
engagement survey “Working at Otovo”, Otovo´s
management regularly sought feedback from
employees regarding their perceptions, feelings
and experiences about working at Otovo.
Employees were asked their opinion about what
the company should do more of, less of, or
improve on, for example ideas for improvement
of onboarding and skill development. Based on
the inputs, Otovo has made adjustments to its
onboarding programs, e.g. scheduling cross
functional meetings into onboarding and
establishing a buddy system, to provide more
individualised support for a new employee.
Talent integration
To enable growth in this dimension, Otovo has
hired HR specialists and invested in a human
resources (HR) information system to allow for
management of employee data and
development of a DE&I dashboard which
provides insights related to D&I data such as
gender, age, pay, employee contract type, and
nationality. The system immediately increased
the transparency of DE&I data, allowing for
leadership to quickly access insights and
establish focused efforts related to attraction
and retention of employees.
Otovo also established role matrices to
highlight the necessary job related
requirements for roles as the basis of internal
development and promotion opportunities
within the Product team.
There have also been concentrated efforts to
recruit more women specifically into technical
and leadership roles and efforts to recruit men
in the customer service teams to ensure gender
balance within these concentrated groups.
Annual Report 2022Page 46
Operations integrations
Throughout 2022, Otovo held company wide
meetings and team retreats. These
collaborative meetings promoted connection,
as well as diverse idea generation, goal setting
and problem solving amongst cross functional
and diverse teams, supporting creativity and
resulting in enhanced efforts to foster an
inclusive work environment.
Otovo’s review of the company-wide Health,
Safety, Environment & Quality Policy is one
example of how Otovo ensures inclusiveness in
the design and development of its policies and
processes. The review involved collaboration
between stakeholders of 13 markets.
Market integrations
In 2022, Otovo amplified its efforts related to
market integrations by expanding into six new
countries, including; Portugal, UK, Austria,
Netherlands, Belgium, and Switzerland. By
expanding into these markets, Otovo
immediately benefited from access to a diverse
talent pool and consumer base. As well, these
communities benefited through the creation of
economic opportunities and job creation
through the establishment of Otovo´s six new
legal entities.
In 2022, Otovo initiated the hiring of a
partnership team. The purpose of this team was
to build and manage strategic relationships
with a wide variety of diverse and leading
brands in Europe, to increase the reach of our
solar proposition. By collaborating with leading
companies in such sectors as utilities, retail, real
estate or finance Otovo offered their customers
a valuable service their partners are potentially
interested in with the added benefit for the
partner of championing a green and
sustainable service.
Diversity and inclusion is also embedded in
Otovo´s design thinking processes. As part of
the product design cycle, Otovo conducts
product testing with a diverse group of users, to
ensure that many different perspectives are
considered when developing our products and
service offerings.
Maturity evaluation
Across the five dimensions of maturity, our self
assessment indicates that Otovo is currently at
the Progressing Level of Maturity, approaching
the advanced.
Basic Progressing Advanced
Leading
Edge
Annual Report 2022Page 47
Actual State of Gender Equality
Statement in accordance with § 26 of the Anti-Discrimination and Equality act.
Gender Balance in Otovo Group
Gender Balance in Otovo Group:
Given as Headcount per 31.12
Office
Female
Share
(%)
Full time Temporary Part time Total
Parental Leave
Avg weeks
(wks/individuals)
Female Male Female Male Female Male
Year
End
Female
Male
Central HQ
(Oslo)
39% 24 38 3 4 17 (34/2) 9 (44/5)
Oslo 38% 9 14 1 2 23 (46/2) 15 (30/2)
Stockholm 17% 4 18 1 - 32 (32/1)
Paris 47% 18 20 33 (66/2) 12 (60/5)
Madrid 49% 18 21 3 1 - -
Warsaw 39% 14 22 - -
Milan 56% 28 22 2 2 - -
Berlin 18% 6 25 1 7 1 - -
Lisbon 55% 6 5 - -
Vienna 45% 2 6 2 1 - -
Zurich 25% 1 3 - -
Brussels 25% 1 3 - -
London 22% 2 7 - -
Shared
Service Hub
31% 4 9 - -
Amsterdam 0 0 1 - -
Year end 39% 137 214 12 17 1 1 382 24
(146/6)
13
(166/13)
Note: Temporary contractor information was not available/tracked for all markets, and therefore not
included in the above numbers.
Annual Report 2022Page 48
Gender Balance in Group Management, Otovo Group (Headcount, 31.12)
Role Female Male Gender Homogeneity
CxO, Managing Directors (Executive management) 1 6 86 %
General Managers. General Counsel 4 6 60 %
(S)VPs 3 5 62%
Total 8 17 68 %
Gender Balance in the Board of directors (31.12)
Role Female Male Gender Homogeneity
Chairman - 1
Board members 3 2
Board members: Employee Representatives 1 1
Total 4 4 50 %
Supplemental Employee Election 2022: In June, we elected a new employee representative to the
Board of Directors, for the period 2022-2023. The supplemental election was carried out according to
the Norwegian regulations on the employees’ right to representation in companies listed on the
stock exchange (No: Representasjonsjonsforskriften). Julie Orzechowski, Head of Operations in the
French market, was elected by simple majority. Otovo currently has an equal split of men and
women in the BoD, in line with the commitments in our sustainability policy and internal
anti-discrimination and equality policy.
Pay Gap Otovo ASA - Annual Total Compensation ratio
Level Description # of women # of men Ratio womens’/mens’ avg. salary
1 Executive Mgmt 0 3 n.a.
2 Top Mgmt 4 4 94.5%
3 Mid Mgmt 6 13 95.7 %
4 Specialists 13 15 97.6 %
5 Managers 6 16 80.8 %
All levels 29 49 88.7 %
Gender Balance in Group Management
Gender Balance in Board of Directors
Pay Gap in Parent Company Otovo ASA
Pay gap in Otovo ASA. The table above shows the pay gap among employees in the Otovo ASA
entity, not including all group companies. Except for the CEO, CPO and CFO the other members of
Executive Management are employed in overseas group companies. For comparison the ratio of
womens’ to mens’ average salary would be 102.8% with the composition for Executive Management
showed in the table under Gender Balance in Group Management.
Annual Report 2022Page 49
Priorities in 2023
In 2023, we will continue our efforts on
promoting and supporting DE&I and
progressing on our maturity level, with efforts
planned including;
● Setting goals and monitoring progress on
our effectiveness on DE&I initiatives
including attracting, hiring and retention of
employees.
● Enhancing our company wide talent
acquisitions processes, establishing
standards for inclusive hiring processes
across our markets.
● Developing and delivering diversity, equality
and inclusion training for all employees and
managers, which will focus on increasing
awareness and understanding on cultural
competence, unconscious bias, removal of
unconscious barriers and inclusionary
workplaces.
● Developing and marketing internal career
opportunities for our employees to provide
them with a multitude of opportunities for
both career advancement and lateral
internal moves.
● Providing opportunities for all employees to
participate in decision-making processes
through team meetings, retreats, and
individual feedback collected through the
Working at Otovo survey.
Annual Report 2022Page 50
Preparing for the EU Taxonomy
While the requirement for reporting on alignment with the EU Taxonomy has not yet entered into
force, Otovo has already done an analysis of its activities’ alignment with the first environmental
objective of the Taxonomy - Climate change mitigation. The analysis is supported by Cicero’s
second opinion on Otovo’s Green finance framework.
Substantial alignment criteria
Otovo considers its activities consisting of sale and installation of solar and battery systems to
private homeowners to be aligned with the EU taxonomy and more specifically the criteria for
activities with substantial contribution to climate change mitigation. Further, social and
environmental risks are handled through our corporate governance policies and procedures.
Final Remarks
ICMA Green Bond
Principles category
Sub-category EU Taxonomy environmental
objective
EU Taxonomy activities
Renewable energy Solar PV and ancillary
equipment
Substantial contribution to climate
change mitigation
7.6 Installation, maintenance and
repair of renewable energy
technologies
Do no significant harm criteria
Otovo considers that all eligible projects meet the do no significant harm criteria:
● Climate change adaptation: When assessing the impact of acute and chronic climate hazards
on any solar installation, we consider effects on both the electrical system and its power
generation abilities and the mechanical system, including the thresholds of mounting equipment
and panels to withstand stress, to ensure that our assets are resilient during their lifetime.
● Sustainable use and protection of water and marine resources: Otovo operates purely in the
residential solar segment, mounting solar systems of private homeowners’ roofs. Otovo considers
that this activity does no harm to water and marine resources.
● Transition to a circular economy: Otovo ensures that all distributors of hardware pay an
earmarked fee for the future handling of solar panels and batteries in accordance with the EU
directive 2012/19/EU for waste electrical and electronic equipment (WEEE).
● Pollution prevention and control: Operating in the residential solar segment, Otovo considers the
risk of pollution to be negligible.
● Protection and restoration of biodiversity and ecosystems: Otovo considers this not to be
applicable to residential solar mounted on existing houses.
Minimum social safeguards
Otovo’s business conduct is based on the principles and guidance in the UN's guiding principles for
business and human rights (UNGP, 2011) and the OECD's due diligence guidance for responsible
business conduct (OECD, 2018). All direct suppliers which are installers of residential solar are vetted
to ensure that the companies follow local rules and Otovo’s HSEQ requirements. See further
information in the Safe Installations and Healthy installers and Human Rights and Responsible Value
Chains sections above.
Annual Report 2022Page 51
To our customers going
solar and partners enabling
the energy transition –
thank you for contributing
to a cleaner future!
Annual Report 2022Page 52
Subscription customers enter into 20 year contracts (10 for batteries) with the asset-owning entity
EDEA, that purchases the system from Otovo. Ahead of the acquisition of EDEA, Otovo’s revenue on a
subscription sale would be the same as on a direct sale. After the acquisition, revenue that stems
from sale to EDEA is eliminated, and does no longer appear in the consolidated accounts.
As IFRS does not allow for recognising the fair value of a subscription contract, the Group has
chosen to use Alternative Performance Measures (APMs) similar to those used by US peers in order
to visualise the value related to the subscription business. In brief, the method consists of replacing
traditional revenue by the present value of the 20 years’ (or 10 years’) cash flow that is generated
from the subscription contract.
For an illustrative project in 2022, Otovo could typically have a margin of around 20 percent on a
direct sale, so if the cost of installation of the system (COGS) is 100, the customer price and revenue
would be 125 and the gross profit would be 25.
If the customer chooses the subscription model, the subscription fee for the same system would
typically be 1 per month or 12 per year adding up to 240 over 20 years. In addition the subscription
fee is subject to annual, upward inflation adjustment. Assuming a conservative 2 percent inflation
per year, the total payments over 20 years would be 290. Using a 5 percent discount rate in the
alternative performance reporting, the net present value of this 20 years’ cash flow would be 175.
These 175 are the net present value of the signed 20 year commitment the customer has entered in
the period, and will be reported at the time of completed installation of the project and be labelled
as “Contracted Subscription Revenue”.
A part of the subscription offering is maintenance on the system, so when looking at the profit
generated over the lifetime of a subscription contract, the expected operations and maintenance
(O&M) costs also have to be taken into account.
Subscription metrics
Figure 1: Revenue and gross profit
related to a direct purchase contract
Figure 2: Contracted Subscription
Revenue related to a subscription
contract
Annual Report 2022Page 53
If the customer chooses subscription, this example shows that the same system generates 63 in
profit, compared with 25 for a direct purchase agreement.
The Group shows these metrics for all subscription contracts generated in an accounting period. As
the revenue and profit generated is counted up front, the recurring revenue over the lifetime of the
subscription contracts is subtracted when looking at these metrics on a Group consolidated level.
Finally, the Group will show an EBITDA-equivalent metric where revenue is replaced by revenue
generated.
Figure 3: Contracted subscription revenue and gross
subscription profit related to a subscription contract
Annual Report 2022Page 54
Annual Report 2022Page 55
Cost of goods sold increased 118%, to NOK 523