SME Recipe for PV SuccessFri, 02/01/2019 - 13:01
Despite Mexico’s attractive PV irradiation levels and the development of a sizable pipeline of utility-scale PV projects resulting from the long-term electricity auctions, PV projects remain a challenging venture for SMEs looking to plant their flag in residential, commercial and industrial projects. “Many companies entered the PV market game but did not adequately gauge the risks,” says José Marquina, Director General of Marsam Solar. “We were able to lay the bedrock of our business with clean competition and client satisfaction to foster win-win scenarios in Mexico’s infant PV market, which is now poised to grow exponentially.”
Based on CRE’s latest numbers, more than 40,000 distributed generation contracts were signed in 1H17 alone. By 2023, this figure is expected to increase tenfold with an estimated 480,000 contracts. Marsam Solar is poised to reap the fruits of its labor. “Several factors impacted our business, including the US presidential elections in 2016, the Sept. 19 earthquake in Mexico City and the recent variations of the US dollar and Mexican peso exchange rate,” says Miguel Marquina, CFO of Marsam Solar. “We were able to establish a solid basis for orderly growth despite these unfavorable events.”
Marsam Solar is a Mexican company founded in 2012 and dedicated to the design, integration and installation of turnkey PV systems. These systems range from 1kWp to 350kWp covering the residential, commercial and industrial segments. To prepare for the expected surge in distributed generation contracts, the company underwent a re-engineering of its business structure. “A fully horizontal organization, systematized by processes instead of department functions, is a much more dynamic, efficient, flexible and successful structure,” José says. He says Marsam’s re-engineering process breaks the usual paradigm of how a Mexican SME works. “We are integrating all the aspects of a PV project, including assessment, site visit, sales, logistics and system installation, in a single team and making it work seamlessly,” he continues.
To ensure the prosperity of Mexico’s PV-powered distributed generation, dynamism in CFE procedures is of the essence, Miguel says. “CFE’s fragmentation into several companies has complicated things in terms of lengthy internal execution procedures,” he says. “Interconnection processes can prove to be a real headache.” After normalizing the Electricity Installation Verification Units (UVIE) procedures, he believes the current hurdle for midvoltage projects is the solar inspection. “The idea is for the market to establish price levels but in reality, given the few companies authorized to undertake inspection work, charges are expensive,” he says.
He also believes the variability of the demand and distribution charge related to distributed generation must change. “It has been modified several times since 2013. It represents from 25 percent to as much as 40 percent of a final user’s electricity bill, depending on consumption, and it cannot be mitigated by the installation of PV modules.”
Despite challenging odds, Marsam Solar has posted constant growth since 2014, with an expected 50 percent sales increase in 2018 compared to 2017. “Not only was our company able to close a partnership with US-based heavyweight SunPower, we also obtained a 220kW PV canopy project for a truck assembly plant,” says Miguel. The company will supply 35 percent of the plant’s energy consumption, using premium panels. “There are several industrial facilities across the country that could benefit from such a solution,” he says.
Marsam Solar has also been able to close PV system installations for companies belonging to the paper manufacturing and agrobusiness industries. The company is confident about the future, considering its niche of clients is progressively considering factors beyond ROI when switching to solar. “Clients are also looking at fiscal incentives and the benefits of realizing energy consumption autonomy,” José says. “We are looking at other strategic partnerships with top-tier technology companies to offer battery-bank management and peak-shaving solutions as soon as battery costs justify their inclusion into either an industrial, commercial or residential PV system.”