STORY INLINE POST
Q: What sets Solar Power Group (SPG) apart from other solar distributors in the Mexican market?
A: Customers choose SPG because we have a wide range of services available. These include education through our Solar Power Group Academy, systems design, project development, project management, commissioning and very well-prepared tech support. Many customers prefer to call us before they contact the manufacturer because they say we have better resources, fast response times and no cumbersome bureaucratic processes. SPG counts on the expertise of architects and civil engineers to provide integral support for racking and shading. Mexico’s solar market might be growing but it is still very much in its earliest stages, which means installers sometimes require extra backup. Furthermore, our partnership with PROINSO has helped us to define this portfolio and establish our inverter solutions.
We understand the needs of installers and try to provide solutions. In addition, we try to help with anything outside of the traditional distribution to remove hurdles and provide benefits. Financing, for example, is a major obstacle because financiers care mostly about large-scale projects. If these funds want to boost their green investments, they need to look at smaller projects as well. For this reason, we have joined forces with a leasing company to connect clients with prolific offtakers.
Q: How has the pandemic’s growing digital transformation benefited the company’s operations?
A: Last year, SPG invested heavily to establish itself in the online sphere. This includes Salesforces’ customer relationship management (CRM) platform, as well as connecting our other teams to online platforms. Every part of the company now runs on technology, including invoicing and tech support. For instance, we approach every tech support case like a sales opportunity. This means that every team is interconnected.
Q: How are changes in Mexico’s energy sector affecting demand for solar solutions?
A: Mexico’s distributed generation (DG) market is not being affected by the political changes impacting the overall sector but companies are afraid to invest nonetheless because they are not sure what will happen in the future. Money talks, so when there is wariness in the sector, people put investments on hold. The current challenge is to educate companies so that stakeholders can make accurate decisions. At the end of the day, it is a financial decision. If solar companies were more sophisticated, they could convince clients and make the sale.
Q: What are the main challenges SPG needs to solve as a distributor?
A: Since we do business with a solar panel manufacturer that operates on this continent, we consider this a benefit because getting panels from the factory to the right location takes approximately four days. Importing from China takes much longer and is more expensive. In 2020, the cost of shipping a container was around US$2,500. Today, that same container can cost US$16,000. This crisis will not be resolved any time soon, but when it is, prices will still be relatively high, around US$8,000. Thanks to the USMCA, we have gained a competitive advantage during this perfect storm of circumstances. Panels manufactured in the Americas might be more expensive because higher quality and cutting-edge technology but it is nothing compared to the costs of shipping and import tariffs. This has greatly boosted our revenues and has allowed us to provide more education and increase our marketing.
Q: Which solar-focused business segments are generating the most demand in the Mexican market?
A: The number of C&I projects is growing rapidly. This is related to the uncertainty in the industry: everybody wants to install solar solutions now so that if something happens in terms of regulation, their contracts would be respected. Uncertainty affects the residential sector more negatively. C&I players are simply looking to get installations done quickly.
Q: How do you expect solutions regarding storage for C&I and residential users to develop?
A: I do not foresee major growth for storage in the C&I segment. Utilities have changed the way they charge C&I energy users. For instance, a few years ago, end-users were very aware of the benefits of peak-shaving solutions. Now, people do not seem very interested in how storage can achieve this, other than in certain areas of the country that are isolated, such as the Baja California grid. In other areas of the country, using storage as a backup makes less sense because outages happen very rarely. If utilities change their pricing structure, that would change the way we see storage. For now, it will not grow at double-digit rates, even though I am quite excited about the concept myself.
Q: How do you hope to close 2021 and what are SPG’s main objectives for 2022?
A: We experienced a great amount of growth over 2021 because of good planning on our part in terms of what technologies to invest in and which brands to develop. When logistics costs began to increase, we made our decisions based on our own data analysis supported by experts, which is considered a usual approach for a solar distributor.
Next year, we plan to open a new branch in Mexico. We are growing our local team (40 people) and are opening a branch in Texas, as well as expanding our presence in Latin America. Furthermore, we now offer our solar carport as our own custom-made product, including rails where solar panels can be installed efficiently.