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Insight

Innovative Mexican PV Panels Enter Export Markets

Wed, 02/19/2014 - 14:47

The Mexican solar energy industry is a net importer of photovoltaic technology. Solartec, a Mexican company, realized the market was flooded with products manufactured in Asia or Europe. After exhaustive research and development, the company produced its first solar panel in early 2010. Solartec’s continuous drive for innovation has enabled it to manufacture new products that take into account the specific needs of the Mexican solar energy sector. “Three years ago, we created the first micro-inverter especially designed for the Mexican market, which remains one of our biggest products,” says Gustavo Tomé, CEO of Solartec. “We also created a very cheap mounting system for the modules with a PET pipe firm, a sister company of Solartec. Both of these are examples of our focus on innovation to capture a bigger share of the market.”

Tomé explains that the process of producing modules is rather easy: the glass, frame and many other components are bought from external providers before Solartec assembles them in Mexico. Where the company really innovates is in sales. It adds value to its products by researching the different ways in which the modules can be adapted. “The micro-inverters we use are assembled in China, but we have the patent for that product. We can also reduce the costs of the mounting systems by designing them with the combined expertise of our PET company partner,” Tomé states. Currently, Solartec has a module production capacity of only 25MW, whereas companies in China have tenfold that capacity. Even though the Mexican solar energy industry has not taken off yet, the company is ready to take advantage of business opportunities the sector provides. The acquisition of Photovoltech, a Belgian producer of multicrystalline silicon solar cells, in February 2013 enabled Solartec to become the only manufacturer of this product in Latin America.

Four years ago, Solartec’s main objective was to export to the US. The firm realized how complicated this was back in 2011 when faced with the much lower prices Chinese companies could offer. However, the market shifted in 2012. Soaring wages in China added to high transportation costs enabled Solartec to become a player in the US market. The company is currently exporting 20% of its total production but aims to increase this to 50% in 2014. “If we wanted, we could focus only on the US market. With our capacity, we can have one or two big clients and allocate our full capacity to them, but we also want to grow in the Mexican market,” Tomé adds. Solartec’s strategy is growing one step at a time, with smaller companies that install solar panels with lower capacity projects. However, bigger companies have also started knocking on Solartec’s door, asking for 5MW and above capacity per month.

But how exactly did Solartec manage to acquire part of the American market and compete with the biggest Chinese players? Tomé emphasizes that the distance between the US and China worked to Solartec’s advantage since the company is able to deliver its products much faster as well as guarantee a quicker turnaround time than Chinese manufacturers, which makes its clients feel more comfortable. “Another factor is that many people in the US prefer consuming Mexican products than Chinese ones. Since we are certified manufacturers, we can produce the same or better quality technology than that made in China,” he adds. Additionally, enhancing customer relations by focusing on offering its clients a face-to-face relationship rather than having them travel to China, has proven to be a successful part of the company’s strategy.

Solartec is working to get the CSI (California Solar Initiative) certifications which will enable it to acquire more clients in the state. Despite this, there is still doubt about Solartec’s ability to survive in the market over time. Tomé explains that, in order to create certainty, the company is now focused on smaller projects but he recognizes the need to take the next step to tackle larger ventures. “We need to move quickly to not miss the opportunity, but we need to avoid growing the company too fast. We are in the process of looking for an insurance company to guarantee the high quality of our products. Another step that we need to take soon is to open more local offices in the US. We have one in California with our partner WCAP, but if we are working to get bigger projects and clients, we will need to expand,” he stresses.

The Mexican market has also presented many challenges, including the lack of knowledge about solar power back in 2009. “It is difficult to persuade people to invest in a system that will make them save money in the long term when they would rather buy an expensive flat-panel TV,” Tomé emphasizes. Convincing Mexicans that they should turn to green solutions has proven to be complicated. Nevertheless, the company knows the importance of promoting and working together as an industry to achieve a bigger goal: the consolidation of solar energy in Mexico.

“We want to help our customers establish themselves in the photovoltaic industry and ensure that they get the training they need to replicate these projects. We want to get this technology installed in many homes across Mexico,” Tomé adds.