The Humm Group Ltd (ASX: HUM) share price is in the green on Tuesday morning. This comes as the financial services company announces a new partnership.
At the time of writing, Humm shares are up 1.24% to 98.2 cents apiece.
What did Humm update the ASX with?
Investors appear to be welcoming the company's latest positive update.
According to its release, Humm advised it has partnered with LG Energy Solution to enter the Virtual Power Plant (VPP) market.
VPP is considered a cleaner alternative to traditional power stations that consume a large amount of space. As such, VPP delivers power by combining the energy from rooftop solar panels and battery storage systems around the country. This technology can be remotely controlled, distributing electricity across the grid.
In addition, the battery storage systems can put excess power in the bank for when it's needed during peak times.
The collaboration between both parties is a major win as Humm is the leading financier of solar installations in Australia. The company has financed more than $2.2 billion in residential rooftop solar panels since its inception in 2010.
On the other hand, LG Solution is a world leader in lithium battery technology for residential, grid-scale, IT, appliance, and electric vehicle use. It is also recognised as the most popular brand with installers looking for solar energy solutions.
Humm estimates the solar and battery market will more than double to around $5 billion per year by 2025. VPP is predicted to become the leading category for solar and battery sales over the medium term.
Both phase 1 and 2 VPP trials in South Australia have been successful with a network of more than 1,000 energy storage systems. Humm is aiming to have 10,000 virtual network and energy storage systems installed by the end of FY23.
Renewable energy retail company Diamond Energy has been appointed as the partnership's electricity retailer.
What did management say?
Humm CEO Rebecca James commented:
Making renewable energy affordable for Australian homeowners has been a cornerstone of Humm for over a decade now, with more than 350 active solar merchants and $547 million of Climate Bond certified Green bonds issued during this time.
Forging into the VPP market, with a technology partner like LG Energy Solution and a retail partner like Diamond Energy will enable us to deliver quality, simplicity and great energy savings to our customers.
VPP is a natural progression for us with 265,000 solar systems financed since 2010. This new channel advances Humm's leadership position by adding to our existing in-home sales and corporate energy finance channels as green energy continues to evolve.
About the Humm share price
It's been a whirlwind year for Humm shareholders, with the company's share price down more than 12% year-to-date.
On valuation metrics, Humm presides a market capitalisation of roughly $485.3 million, with approximately 495 million shares outstanding.
