A More Holistic Approach for C&I SolarBy Cas Biekmann | Thu, 12/17/2020 - 10:01
Q: What attracted RER Energy Group to Mexico’s solar market?
A: RER focuses mainly on commercial and industrial (C&I) projects across the world. In 2014, the company started looking at the Mexican market to diversify its business, which was rooted in the US. Mexico looked like a promising market due to the newly established Energy Reform and because solar radiancy is incredibly high in some areas of the country. Mexico was also considered an easy place geographically to start other operations. It took the C&I market three years before it was ready to start deploying solar projects. RER, however, decided to take the initiative and start with other activities. This included participation in a larger-scale project, as well as doing some pilots until the market was ready.
CRE’s statistics show that distributed generation (DG) has passed the 1GW boundary this year, and it now represents the fastest-growing renewables market. We are glad we entered the market early because we gained experience and were able to educate the market. In 2014, it was difficult for people to understand concepts such as PPAs or even to realize that solar works. Now, more people understand solar and no longer have doubts when committing to long-term PPAs. We have seen an evolution of clients, businesses and even competitors. Large multinationals want to adopt solar because C&I solar makes sense economically and in terms of the regulatory framework. It is an interesting business model in Mexico and we see a great deal activity taking place.
We like to work with SMEs, and can offer them financial options. We also provide holistic solutions to multinational companies that have offices across the country and need an energy management system. Our holistic approach looks at the quality of energy, efficiency and ways to reduce CO2 emissions, beyond the usual energy generation. This has led us to projects that involve concepts beyond solar, adopting megatrends related to smart grids and microgrids.
Q: Which project showcases the company’s capabilities to deliver value for the C&I segment?
A: We have been working with a Multinational Company that has a more holistic approach given their target to reduce CO2 emissions. Within a few years, they want to become carbon neutral. We have been doing solar projects on-site to help them achieve this goal and switch their vehicles to electric, powered by solar energy. This clearly represents the trend we are pushing, not only in incorporating solar but using other components as well. This includes storage in the form of electric vehicle batteries. We also provide them with solutions to improve the quality of energy, which is now an important topic due to possible fines and taxes that can be levied if companies do not comply with the grid code. We are doing all of this with a digital tool, which helps us run a better energy management system.
Q: What role do you foresee for smaller solar systems in Mexico’s energy mix?
A: Large-scale renewables are undergoing a difficult time in Mexico. There has been a great deal of uncertainty in a year full of litigations; with every policy the government revealed, the industry responded with legal actions. Most of these amparos have been won. However, this has definitely impacted large- and medium-scale markets, due to the size of investments they require; therefore, risk should be avoided.
DG is, therefore, the only market that has not been affected. RER participated with ASOLEMEX in one amparo, and litigated as RER in a collective amparo as well, which we won a couple of weeks ago. We know that we need to be active and united to foster what we believe is good for Mexico. We cannot wait for anyone else to do the work. Furthermore, RER tries to initiate dialogue with the government so that it is aware of all the benefits that renewables bring. This is not only in regard to decreased CO2 emissions and meeting growing energy demand but also economically speaking. The number of jobs DG has created in recent years has been outstanding, much more than utility-scale projects have created. The DG market is unstoppable. Even if the SENER regulation or others had gone through, this market would not have been stopped. The economics of DG are so good that even without being connected to the grid, by using storage, it makes sense. The momentum for the DG market will keep moving forward. Nevertheless, how fast or slow progress is will depend on policy.
Q: Considering RER’s experience in US-based community solar, how do you expect this trend to develop in Mexico?
A: We wanted community solar to take off in Mexico. We see this as a breakthrough business model that will introduce many opportunities for those who do not have space or resources available. Unfortunately, regulation that was very advanced has been eliminated. That is a setback because regulation is needed to move Mexico’s solar community forward.
Q: How could Mexico’s solar sector work to put such regulations at the forefront of the policy agenda?
A: I believe associations need to work together, which is something that we are seeing happening now. We need to be united and present strong arguments that highlight why these developments are good for the people of Mexico. They benefit the government, transmission lines, the final users, the industry and climate change. Mexico depends on agriculture and the country already tends to be quite dry. It is, therefore, important to avoid an increase in temperature. Associations and companies should not look at each other as competition. Instead, we need to see ourselves as a united front, working together to push regulations forward.
Q: How is the company working toward the possibility of implementing hybrid solutions in the Mexican market?
A: We focus on data. We need data for all of these components to be introduced. This data cannot be easily obtained from CFE. Therefore, we are occupied with data systems, data acquisition and digitalization to develop an easier way to model these new solutions. They need forecasting and accurate modeling, as we have seen in the US, where, it is easy to get a very good quote for an accurate hybrid solution with storage. With enough data, this can be arranged in a day, incorporating peak demand analysis for storage and other factors. This is greatly needed in Mexico.
Q: What goals would RER like to achieve in 2021?
A: It has been difficult to make forecasts with this current pandemic, although we are working on that. Nonetheless, we expect an exponential growth in 2021. In terms of general goals, we aim to position ourselves as leaders in guiding companies in the Mexican market toward a more holistic approach.
Furthermore, RER energy Group works with different financial solutions for the Mexican market. These options are becoming more innovative and interesting. There is a great deal of need for financial solutions in Mexico. We are working to expand on this front. We are also always looking to innovate with long-term solutions that are financially feasible. Therefore, we are working to incorporate the megatrends of smart grids and microgrids with long-lasting financial solutions that are considered safe for investors.
RER Energy Group is a US-based national leader in solar energy that designs, builds, finances and sells cost-efficient and quality solar energy systems to commercial and industrial companies.