Distributor Supports DG Growth Despite Challenges
STORY INLINE POST
Q: How important is the Mexican market for Krannich Solar?
A: Krannich Solar is a German company and our focus is on distributed generation (DG) for residential, commercial and industrial environments. Krannich is also a 100 percent distribution-focused company, so we do not work in installation, engineering or other parts of the business outside of distribution and customer support.
The company decided to come to Mexico because it saw many opportunities in the country. Mexico is among the top countries for most solar potential. The government is perhaps not fully supporting the renewable solar industry but we think it is important to be present in the market and show our long-term commitment. There is still a market close to 500MW to benefit from. The market will hopefully pick up faster in the future, just like we are seeing in Brazil over the last years.
Q: What is the main challenge for a distributor in the market and how do you work to overcome it?
A: Since the start of the pandemic, logistics have become a nightmare. Prices have increased heavily: we used to pay US$2,500 for a container from China to Mexico. This year, we had to pay up to eight times that amount. We are seeing prices drop somewhat, but you cannot foretell the future. Due to the increased level of insecurity, shipments have become riskier too and time frames have increased quite a bit. Furthermore, raw materials are becoming scarcer so there are fewer solar panels being produced at a much higher price. Many projects are being postponed as a result.
These issues are global and outside of our control. Nevertheless, we hold conversations with our customers to manage expectations and provide an optimal service to Mexico’s solar market. It is new to see prices on the rise after decades of cheaper costs. Despite this, we have encouraged customers to place orders before prices increase even further. In any case, open communication with customers is essential. Another major tool for Krannich is communication via webinars, face-to-face meetings and newsletters.
Q: What important partnerships are helping the company grow its market penetration?
A: All our partnerships are very important to succeed with the business and cover the needs of our customers. Jinko and GoodWe are recent examples to grow our market penetration in Mexico. In 2021, Jinko Solar was our No. 1 brand, followed by Axitec and Canadian Solar
Over the past few years, we have grown with them, having known the companies for a long time and gaining extra support from their side to overcome current problems in the market. Jinko and Canadian Solar are a Tier 1 manufacturer and consistently top-rated, with state-of-the-art technology. More importantly, its solutions work very well in the Mexican context, which cannot be said for every solar panel player.
We began our Mexican relationship with GoodWe two years ago, when the market was dominated by European brands. Today, Chinese brands are gaining ground. They are cheaper but their reliability can be excellent as well. GoodWe, for example, tests its products before it sends them out. Our global partnership with the company helps us to decrease the necessary tech support.
Krannich also supports many other brands. In terms of inverters, we have been long-term partners with Fronius, SMA and SolarEdge, as well APS & Enphase in microinverters..We aim to maintain and offer a diversified portfolio of products.
Q: What do you expect for solar technology in Mexico and what are Krannich’s objectives?
A: The steady growth in the market will continue. Unfortunately, this growth will likely not be exponential because the factors needed for a major boom are not aligned. Nevertheless, younger generations are becoming more aware of solar and its potential to help make the world more sustainable. These voices need to be heard and in turn, they will ensure solar continues to grow. As a company, we try to raise awareness regarding solar power use.
People are beginning to ask for storage-minded products and we are looking to our partners and installers to bring their solutions to the Mexican market. The company is always looking to increase its market share and examine if it needs more warehouse space.
Krannich Solar is an originally German distributor of solar technology with over 25 years of experience. It has been present in Mexico since 2014 and offers some of the world’s leading solar technology to the local market.