Sebastián Ramírez
View from the Top

Prepare for the Future and Diversity

Wed, 02/21/2018 - 17:55

Q: How does Vivesolar differentiate itself in a market that is crowded with distributed generation solar providers?

A: Vivesolar started operations six years ago as an online solar calculator for Mexican clients investigating the profitability of installing rooftop solar panels. Data is therefore imprinted in our DNA. Over time, we changed our business model, becoming a link between customers that wanted to install solar energy and installers. We quickly noticed, however, that it would be hard to charge for that service. This led to the final iteration of Vivesolar as a provider and installer of solar photovoltaic panels for the residential and commercial segments, for customers in DAC-2 and O-M tariffs, respectively.

From the very beginning, Vivesolar has differentiated itself by providing excellent service based on four pillars: choosing the ideal technology for the project, offering tailored financial solutions, closely monitoring every installation we perform and finally, offering flawless post-sale services. While most companies in the market try to offer the lowest prices possible, we have higher up-front costs but offer a follow-up service that ensures that the customer will obtain the expected financial savings from the first month onward, as well as a 15-year service guarantee for maintenance. During those 15 years, clients do not even have to worry about leaks in their roof, a common problem with low-quality installations that we have eliminated thanks to our in-house patent. Post-sales excellence is also how we ensure that our strongest assets for communicating our abilities — meaning our clients — are happy and work for us by recommending us personally to their connections. Few, if any, companies can match our postsale excellence in the markets we serve.

Q: How do you expect the residential and small commercial distributed generation market to evolve in Mexico?

A: Vivesolar is growing faster than the market but we do not expect there will be a single dominant company across the entire Mexican market anytime soon. Instead, we see the residential and small commercial market 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 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; 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.

Q: What is Vivesolar’s strategy to remain competitive in a tightening market?

A: In October 2017, we launched Energeist. This new subsidiary answers Vivesolar’s need to provide valueadded solutions to the industrial market, as the needs of these customers are different to those of residential and commercial clients. Energeist does not only provide solar installations but complete engineering solutions that allow us to measure and understand their energy cost, implement efficiency measures and propose a range of economicallysound technologies that include photovoltaics, solar thermal, heat pumps and battery storage.

Energeist will have its own operations but the separation does not mean it will not benefit from the knowledge gathered by Vivesolar. We are actually seeing similar challenges in the incipient industrial sector as those faced by the residential market when it was just starting. Similarly, industrial customers have doubts about the technology. They wonder whether it will be profitable to install money-saving measures that include renewables and energy efficiency. To answer their questions, we are turning back to our original data-driven DNA, measuring energy consumption and determining how to best use the tools available to benefit our industrial clients.

Energeist has been working on two pilot projects since October, one with a hotel in which we are offering energy, power and heating savings, and another on an edge-of-thegrid farm that requires generation and storage. These pilot projects offer us the opportunity to learn and then transfer our knowledge to other industries. Our expectation is that both Vivesolar and Energeist will remain competitive once the market crunch in the residential and small commercial segment sets in. At that point, Vivesolar will remain competitive in the regions we serve with a recognized brand and extremely efficient processes, whereas Energeist will remain competitive by providing higher engineering value for niche users.

Q: What are Vivesolar’s goals for 2018?

A: We have two very different goals for our two brands. On the residential and commercial side, we want Vivesolar to become the undisputed leader in the residential and small commercial sectors in western Mexico. When a potential residential or commercial client thinks about a quality solar installation, we want to be the first company that comes to mind. We expect Energeist to become a national reference in the area of energy engineering for the industrial sector. Energeist’s complex activities, rich in value-added engineering, will be cost competitive even in faraway regions, meaning that we will expand by the end of next year.​​​​​​​