Energy Transformation Leads to Revamped StrategyWed, 02/22/2017 - 15:19
Q: What led to ET Solar Energy’s successful entry into the Mexican market?
A: Since 2015, we have positioned the brand successfully in Mexico, starting with medium and small-sized DG projects and then focusing on utility-scale PV projects. We are working closely with project developers, supporting their efforts to reduce the LCOE in their projects. The company decided to follow this strategy because of the transformation taking place in the Mexican energy industry. We expect the market to take off completely in two to three years once financial certainty has been established, and we built our strategy around this assumption. Luckily, we seem to have made the right decision as ET Solar’s panels were among the three most sold solar panels in the Mexican DG sector in 2015 and 2016.
We are now redesigning our strategy to fit the industry changes we witnessed in 2016, putting a stronger focus on utility-scale customers. Mexico is a highly attractive market for a wide range of industries and it is a gateway for other interesting markets not only in the energy sector, which has motivated us to consider opening a manufacturing facility here. We have plans to build a top-notch solar cell factory in Mexico. ET Solar Energy places great importance on innovation, so we would like to have high-level production lines with digital platforms so clients can customize their products.
We are now expanding our local workforce and we are confident will close the year as the best-selling solarpanel brand in the market. We have already signed contracts in the utility-scale segment, accounting for 200MW to be delivered in the next two years. This has taken our company to the next step, allowing us to invest further in local business development and drawing closer to materializing the idea of manufacturing in Mexico.
Q: What do you look for in a local partner and what kinds of partnerships have been crucial for your operations?
A: When we were planning our strategy for entering the medium and even small-scale market in 2015, we realized that the DG market had recently opened in Mexico. Before that year, solar-energy companies had to do a lot of multitasking due to the market’s immaturity. In 2015 the DG market was finally established so we looked around for suitable partnerships. Unfortunately, in Mexico there were only a few companies with the required financial capabilities, infrastructure and experience to become our local partners. Nonetheless, companies like Exel Solar, a Mexican wholesale supplier of solar-energy products, emerged as an excellent option to become our partner. We worked closely with them to design and launch the ET Smart Flex product in Mexico, which is assembled locally to reduce costs, providing an added value for customers. Exel Solar not only had the proper financial and physical resources to become our partner, it also had a great team that contributed enormously to our entry into Mexico.
Q: How can ET Solar help utility-scale developers be competitive in the current price environment?
A: Our strategy is to help utilities with plants between 5-500MW achieve competitive power-generation costs and reduce their LCOE. We are part of the efforts by the solar-energy chain to increase competitiveness against other technologies, which is crucial for companies participating in CFE’s power auctions. As happened in the first electricity tender, solar-energy prices have become highly competitive, forcing companies to take an aggressive approach.
We are working with some of the tender’s participants, establishing macro-agreements across different Latin American markets to ensure they have competitive prices. We guarantee aggressive prices through contracts based on market estimates, in which we consider everything needed to produce a solar panel for the next four years, so we can now guarantee a competitive fixed-price for panels that will be produced and sold in 2018-2020.