How can high quaiity be provided in the DG Mexican Market?Wed, 02/21/2018 - 18:04
The boom in energy distribution services in Mexico is unquestionable. With 186,628kW installed from January 2016 to June 2017, this 18-month period represented the installation of 62 percent of the total during the last 10 and a half years. According to CRE, this trend will lead to an exponential increase in installations that is expected to reach over 6GW of accumulated capacity by 2023. With a boom in place and many new companies arriving, what is the differentiator that will drive success in the market?
SEM started out as a PV systems inspection company for private clients. As demand for our services increased, we noticed a financing gap. We created an investment fund specialized in financing solar energy projects for distributed generation applications. This new development led us to where we are now: installing PV systems while simultaneously financing them. We offer a seamless energy transition, with no bureaucratic hindrances and no costly initial investments. The rising demand for PV systems under a distributed generation scheme was paired with interest from individuals in investing in this technology, but there was no tool available to those investors. Our need to finance our PV systems coupled with investor interest created the perfect storm. We integrated this investment platform into our website both as an additional service within our portfolio and as a source of capital.
Our experience in the residential sector shows that it all comes down to price. More often than not, such a mindset overshadows the quality factor, resulting in a bad name for renewable energy in general, and solar power in particular. Eco Ener only works with top-tier brands in terms of quality. The industrial and commercial sectors are ideal for showcasing this quality and are very receptive to our experience and expertise. Not only is the manufacturing guaranteed and certified but we can also monitor in real time the aggregate performance of a solar system, module by module. Our advanced monitoring system also measures total electrical energy used by the customer, and calculates the net electric power purchased from CFE. In other words, we provide more value with an energy-efficiency analysis platform.
We offer four guarantees we believe to be unique in the residential distributedgeneration market. First, we deliver on the stipulated date or we cover the electricity bill generated in the extra time it took us to comply. Second, we offer a yearly PV production-cycle guarantee. If the solar modules produce less electricity than what we guaranteed, we cover the difference plus an additional 10 percent. Here is where our monitoring technology and software comes in handy, because it tells us with absolute precision how the modules are behaving. This in turn helps us design corrective measures when necessary. Third, our installations are guaranteed for three years. Finally, we guarantee our clients representation with CFE when needed.
Trinova is invested in and committed to the quality of the products we supply and install. Our long-term vision is our safeguard against complaints, instead creating a platform of satisfied customers through 25-year warranties. Trinova is also very demanding when choosing inverters. Quality and reliability were our main criteria when we chose to work with top-tier companies such as Fronius, Kaco and SMA, to name a few. Trinova started by penetrating the residential PV market, which paved the way toward consolidating our brand in distributed generation for the industrial and commercial sectors, becoming a reference in installing and maintaining quality, certified solar modules. Since 2013, we have installed 4MW of capacity. This year alone, between installed capacity and pending installations, we added 2.2MW to our portfolio.
We do not expect there will be a single dominant company across the entire Mexican market any time soon. Instead, we see the residential and small commercial markets divided by regional champions and players servicing particular types of clients. Regional division means it will not be profitable for companies to venture into areas where another company already has a strong presence and client recognition. Some companies will differentiate with higher up-front costs but better service and others will offer cheaper prices at the expense of higher future risk. We are already starting to see these divisions and although the market is now growing, we expect to see a crunch in a couple of years, with lots of consolidation. This does not mean the market will shrink; in fact, sales will be much higher than today, but it will become so price competitive that only a few companies will survive, and even those will have marginal profits.
Bright is usually thought of as a solar installation company but in reality, it is a software company. We are building a software platform to allow everyone working in solar to be efficient, cost-effective and to scale up operations as fast as possible. We partner with local installers, suppliers and entrepreneurs as well as with international manufacturers so they can act together with local players and install the solar equipment. Our sales partners are comprised mainly of student ambassadors who promote and sell the technology, so the entrepreneurs and installation partners can provide the solution. Bright’s software connects all these pieces together. Instead of just being a single-service provider, Bright is a full-service provider that integrates all these services to make an efficient and customer-oriented solar system.
It is hard to convince corporate entities of the value of thermal solar technologies because these are still in their infancy in Mexico. When technical and economical justifications go hand in hand, you have the ideal scenario for a corporate behavioral shift and greater acceptance of newer technologies like thermal solar applications. We are convinced that solar thermal has great potential application opportunities in Mexico, given the low number of companies that use it. For instance, the pharmaceutical industry could benefit greatly as it constantly requires high-temperature systems that solar thermal technology can provide. Large companies seem to prefer PV systems, which have a longer track record, despite the fact that it is costlier and that the timeframe for recovering ROI grows threefold compared to solar thermal.