Startup Leverages Tech to Accelerate Solar Adoption
STORY INLINE POST
Q: What is the importance of solar-based distributed generation (DG) in the fight against global climate change?
A: Many people across the world are talking about the importance of reaching net zero targets. The recent COP26 highlighted the magnitude of the challenge to achieve these goals by 2050. Studies show that to reach net zero, we should not only stop investing in new coal, oil and gas projects, we would also need to quadruple our wind and solar capacity by 2030. For solar, this is the equivalent of adding the capacity of the world’s largest solar park every day. Not all countries have both the capacity and the land available to build solar parks on such a scale. Expanding utility-scale solar projects needs to be part of the net zero roadmap, but we think that the acceleration of DG should be a bigger part of this solution. Our vision is to make solar energy as ubiquitous as a television or refrigerator. That way, anyone can generate energy at the point of consumption, limiting further investment in transmission lines or distribution capacity.
Q: What convinced Solfium to get started in the Mexican market?
A: Solfium is a tech startup within the solar energy environment. We see a big opportunity in the DG market in Mexico and many other countries. We decided to begin in Mexico due to the tremendous potential in the country, as well as the founders’ personal connection and presence in Mexico.
Solar energy is the cheapest way to generate electricity in most parts of the world; Mexico and Latin America are no exception. Nevertheless, there is still a lag in the adoption of solar energy in the country despite the attractive economics. The costs of a system can be amortized within three to four years on average, whereas the system itself lasts 25 years. Despite this, the average share of solar power in the Latin American energy mix is 3.6 percent. This makes an interesting business case to push solar energy, especially from a sustainability point of view.
This year, we will focus on implementing our first customer partnerships, further developing our technology, and addressing our potential pipeline of US$55 million of projects lined up stemming from our customer agreements. We will also continue to develop our foundations in order to scale up quickly. Social impact projects, including supporting co-ops and small businesses like local bakery Pan Q Ayuda transition to solar energy, also play an important role in our work and is aligned with our mission. Furthermore, Solfium was recognized by the Geneva-based Solar Impulse Foundation as one of the ‘1000+ profitable solutions to protect the environment’, lauded for the efficiency of its solution. We are the only solar technology company in Mexico to have this distinction.
Q: How did Solfium reconfigure its value chain to focus on customer experience via its technology?
A: Solfium figured out that if solar energy was to be adopted over time, the customer’s journey needed to be easy and accessible. For this reason, Solfium reconfigured the solar ecosystem to put the customer front and center. We have created technology that makes solar easy and accessible via a mobile app. The goal of this app is to make solar as simple as ordering an Uber: clients input their electricity consumption and get an instant quote. They can also chat with our experts about the specifics of the system. Once customers are ready to proceed, we match them with our local installers and send our drones to take measurements and show them what the installation would look like without being too intrusive. The installation and post-installation customer support is also coordinated via the app.
The company partners directly with manufacturers to offer a premium product at a competitive price, delivered in the form of a kit that ships directly to the customer. By standardizing our offering and having the manufacturers as partners, the customer receives better support when compared to traditional companies. We bring a menu of financing options via financing partners, such as banks and fintechs, that are integrated into our app. These include unicorn startup dLocal as well as local Mexican bank CIBanco. Solfium also partners with logistics companies to optimize the value chain. Finally, we provide fully trained and certified installers to create a superior customer experience across the whole country. The goal is to empower new entrepreneurs in solar installation and set them up for success. With the app, we schedule the installation and monitor the entire experience and provide all the support needed afterward, including warranty support and system upgrades. The app is a real one-stop-shop for the end user.
Q: What opportunities has Solfium identified in the C&I and residential sectors?
A: We see a big opportunity across the entire range of the market. Small commercial activity is particularly interesting. For instance, Solfium recently completed a project for a corner store, of which there are more than 1.2 million in the country. These stores pay much for their electricity and want to add more fridges to increase their product offerings without raising costs or becoming less sustainable. With our app, we can help them switch seamlessly to solar energy. For now, battery storage is not yet a part of this optimal value proposition but this will likely change in the future as battery costs continue to decline.
Furthermore, Solfium is already working with industrial customers. Here, the paradigm has shifted: many companies want to become more sustainable. As a tech service provider, we can offer them a turnkey solution to go beyond their immediate installation below the 0.5MW threshold of distributed generation. These companies care about their value chains too, so we help them to address the energy needs of their workers. With home office, an employee’s house is almost an extension of the company, so we support companies that want to help their employees adopt solar at home.
The same goes for suppliers and even customers. Emissions are measured across the value chain. To become truly sustainable, emissions must be reduced across all metrics. Our corporate partnerships can address all these issues. We also provide companies with the tools to measure their impact via a real-time sustainability dashboard that shows their progress across the value chain. This also makes for a good story to tell for the company. It is a win for everyone involved.
Solfium is a Canadian company focusing on distributed solar energy for homes and businesses in Latin America. Its main differentiation lies in its innovative platform and mobile app.