Solar Industry’s Future Is Bright Despite Recent Uncertainty

Q: How has Solar Center's business grown in recent years?

A: Solar Center has grown exponentially in the past few years. From 2017 to 2021, progress report data shows a 500 percent growth. We went from having a dozen clients to having thousands every month. The advancement of the Mexican solar market is the source of this growth.

Q: How does Solar Center select the companies it partners with?

A: We look for companies that want to focus on the Mexican and Latin American markets. We need the companies we partner with to understand the particular dynamics of our region. In some cases, we were in contact with companies interested in commercializing their products in Mexico but when analyzing their portfolio, they were incompatible with the characteristics of our elecrictical network or market. Once we filter suppliers by their offered product, we focus on the added value that they offer, as well as their overall financial status. More than simply searching for suppliers, Solar Center looks for alliances with factories to partner in distribution throughout all of Mexico and Latin America.

Q: How has the regulatory uncertainty in Mexico impacted Solar Center?

A: The impact on renewable energy caused by the regulatory uncertainty has been felt by the entire solar industry, not only distribution. Although the energy reform initiative did not directly affect Distributed Generation (DG), the uncertainty it brought about for users affected the solar sector’s overall growth. Many residential users who wanted to adopt solar technology in their homes were discouraged from doing so by the news circulating about the regulatory changes. This led to many potential clients postponing their projects or stopping them for good because they were worried of the unknown. The confusion about the new renewable energy policy has definitely indirectly impacted DG for this reason.

The impact on the reduction of DG development was mainly seen in the commercial and industrial (C&I) areas because many companies decided to suspend their projects until greater clarity emerged.  Our growth during 2021 was negatively impacted and slowed greatly down because of this waiting period. Now that the energy reform has been vanquished in Congress, the Mexican solar industry is expected to regain its enthralling growth rates.

Q: As a distributor, how did the supply chains’ problems and delays affect Solar Center's operation?

A: In 2021, the supply chain collapsed in many areas. Most of our suppliers canceled already signed contracts. Those orders had to be renegotiated, causing further delays. In addition to longer supply times, there was also pressure from price increases. The reasons for the higher costs varied. On the one hand, there was huge demand of silicon, as all solar cell manufacturers where desperately seeking supply. The shortages of this material caused prices to rise. On the other hand, there was also the shortage of computer chips worldwide, which led to steeper inverter costs. In many cases, solar inverters use a similar chip to those used in a car, therefore impacting greatly the product price and availability.

Logistics have also been a challenge. Most shipments contain delays that are difficult to predict, affecting our delivery times as distributors. To deal with this issue, Solar Center forecasts and plans its inventory equivalent for one year to place purchase orders well in advance and maintain sufficient stock. With this strategy, we can limit the issues we face regarding our distribution commitments.

Q: How do storage solutions add value to renewable energy projects?

A: An increasing number of people find a great deal of value in being energy independent. Leaving behind dependence on CFE or any other energy supplier gives power to the consumer. Experiences such as the 2021 blackout in the northern region of Mexico reiterate the importance of reliable energy being available to all, for basic services for households, as well as larger scale services for companies. In this situation, for example, providing storage solutions opens the possibility for energy consumers to have access to backup electricity. Batteries reduce the risks of blackouts in the face of grid problems, as well as provide stability to the renewable energy power production. As this technology become more financially viable, we may see an increase in the demand of this solutions, including residential, commercial and industrial projects.

Solar Center is the most comprehensive distribution center in Mexico for solar energy solutions. Currently located in five states, Solar Center offers a wide variety of photovoltaic and thermal systems that provide solar solutions with various generation levels.