Javier García
Director General
Socios Energéticos de México Verde
/
Insight

Solar Energy Needs Government Support to Thrive

Wed, 02/19/2014 - 14:35

Q: What does Mexico need to support the development of the solar energy industry?

A: The government has to get involved. In the US, regardless of the project size, the federal government provides a 30% investment tax credit on the cost of PV equipment, on top of other state and municipal tax incentives. This is something we do not have in Mexico but we need it in order for the solar sector to thrive. This should perhaps not come in the form of incentives or subsidies, but the government could help the industry by facilitating financing at low interest rates. The main obstacle we have faced is getting access to financing. Solar projects are not common in Mexico and people are hesitant to invest. When 10% of the energy in the country is generated by the sun, the situation will be different and everyone will want to invest.

Q: What was the motivation behind the creation of Socios Energéticos de México Verde (SEMV)?

A: SEMV’s intention is to transmit the importance of generating energy from renewable sources, while lowering environmental pollution. We are convinced that solar energy is the best option. It is a free energy source and we believe that if we have been able to generate energy from fuel, we can do it from solar energy in a profitable way. That profit may not come in the short-term or match those coming from fossil fuels, but the sun is definitely a profitable source of energy.

Q: How would you rank the attractiveness of the Mexican market in comparison to the US and European markets today?

A: Opportunities exist for solar energy almost everywhere in the world. The difference lies in who wants to invest and how, as solar projects involve a long-term return on investment. We are aware the competition is strong, but we know that the projects with the strongest foundations are the ones that will be successful.

Q: How does SEMV work in order to generate local knowledge of the solar industry?

A: Creating a wealth of local knowledge about the solar industry makes sense for us as a company and the industry at large as it will benefit us in the future. We are currently working with Universidad de Monterrey and Universidad de Monclova, offering them training courses and looking at the possibility of adding a class to their engineering programs.

Q: Which technology trends will have the greatest impact on the cost competitiveness of solar energy?

A: Over the two years we have been working in this sector, we have been constantly searching for the best technology and capacity. Technology improves each day and we strive to offer the best options to our clients. We do not favor solar trackers as their energy consumption is very high and requires a lot of extra accessories. On top of that, maintenance is 30% more expensive than for the systems we install. SEMV sells 1MW in systems but installs 1.2MW in capacity. Tracking can be done using those extra 200kW, thus reducing maintenance and saving clients from having to pay for the tracker.

Q: What separates SEMV from other solar energy companies currently operating in Mexico?

A: Our main differentiator is that we provide 100% financing and a 25 year warranty on our projects. There are no excuses to not start up a solar project with the conditions we offer. Our clients do not have to invest for five years and do not pay until the project is up and running.

Q: What do you see as the greatest growth opportunities for SEMV in the future?

A: Over the next five years, we want to become industry leaders with an installed solar energy capacity of 500MW. Our strategy is focused on low cost, quality, and guarantees. Our goal is to open a solar panel manufacturing facility in Mexico. But first we have to sell 100MW to have the demand needed to open a local facility.