Solar-Based DG Is — and Will Be — an Easy Decision

Q: Why should companies pick Tecsolar over the competition?

A: As our core business, we offer flexible financing so that small businesses can install solar panels and produce their own power via distributed generation (DG). This flexible financing is about giving value to the customer and providing them with energy savings, requiring no investment at all. At the end of the term, customers will have the infrastructure needed that will save them money for years to come. We focus on the needs of small businesses and can adapt to them, which gives us an extra edge over the competition.

The system is simple: businesses can pay for the residual value of the photovoltaic solar system at any point in time. Every month, they pay for the use of the equipment. They are paying off this value. Our payment scheme is a little different from the competition because clients get a discount from CFE tariffs, through a micro-PPA. The difference with regular PPAs is that customers get to own the equipment at the end of the term. Furthermore, Tecsolar puts itself in charge of these savings, paying the difference itself if the system does not generate enough savings compared to CFE prices. Our clients can be found within a variety of C&I environments, ranging from mom-and-pop stores to the food producing industry.

Q: How does Tecsolar add value through monitoring and maintenance?

A: Everything starts with monitoring. Companies need to continuously monitor the performance of these systems to obtain the best results. Tecsolar works across Mexico, a country that has diverse climate conditions. For instance, the equipment we install in Yucatan is not the same as that which we install in Monterrey. Monitoring is, therefore, of the essence, as well as having people on call who can rapidly remedy problems. Our partners help us add value in this regard. In the end, nothing is more expensive than a system that does not produce optimally, both for us and for the customer. To make monitoring easier, we choose to work with central inverters, mostly using Huawei’s platform. While it is true that string inverters are better for fine-tuning, the benefits of clear monitoring outweigh this customization on DG systems. Statistically, central inverters are less likely to fail. This makes sense: more equipment means more issues can pop up.

Q: How does your experience working for an important offtaker like Kellogg’s help you to provide optimal solutions for clients?

A: Before I moved to renewable energy, I worked for 10 years in the operations department of Kellogg’s. During that time, I came to have a good macro view of the company, so when I moved to the renewable energy sector and eventually went on to sell PPAs, I could see the value of this experience. I understand how difficult it is for companies to make the best choice in how to address their energy supply. There are many options available, which can be daunting for people who are not experts in the matter. Since I have worked on the other side, it is easier to explain all the possibilities to potential clients and to highlight which solution is the best fit for them.  

Q: What do you predict the growth of DG in the Mexican market will bring?

A: I believe that DG is always the best basis, after which companies can incorporate other options. It is true that the closer you are to the electricity generation, the more benefits everyone gets because there is no need for large investments in transmission and distribution infrastructure. There is not a huge difference in costs between a massive solar farm and a small rooftop installation when transmission costs are factored in. I think that DG will grow rapidly for the next three to four years. It is already doubling in capacity each year and the market has barely been tapped. Many potential clients are not aware of this option, though many are getting to know DG and are actively looking to lower energy costs. I believe solar is an excellent option for many and I advise companies to go for it. Looking at electricity costs, solar is a no-brainer these days.

Q: How could the government’s efforts to reform the energy sector affect the DG market?

A: I have seen the government’s proposal to reform the Constitution and I do not believe it is a good idea at all because it can harm the country’s competitiveness. That being said, the government is not touching DG because it is not altering Article 68 of the Electricity Industry Law (LIE), which concerns non-restrictive access to the grid for such installations. If Article 68 remains, DG-users should not be concerned. SENER has also said it will encourage DG; nevertheless, with the amount of noise going on in the sector, it is hard to tell what is happening.

In fact, electricity prices will rise toward the midterm if the reform goes through because CFE is a less efficient power producer. Indirectly, this will push more people toward DG, especially if qualified users and self-suppliers are pushed out of their markets.

Q: How is the company planning to grow within the Mexican DG market?

A: We are ambitious for 2022 and have a budget to match. We will focus on growing our volume in Mexico’s industry so that we can obtain better prices and a flawless execution. The DG industry is very competitive. There are many companies that do their job well but we will simply focus on providing the best solution. In doing this, our goal is to double our installed portfolio compared to last year, up to 5MW.

Tecsolar is a Mexican company in charge of developing, installing and financing distributed generation systems based on solar energy. It sets itself apart with a tailored financing solution and focuses mainly on C&I clients.