Supporting the Bottom of the Pyramid

Small-scale energy projects, the kind that small energy consumers could implement, tend to have difficulties securing financing. With scarce options in the market and those existing working only with short ROI periods, these kinds of projects often collide with a brick wall.

The financial hurdle for small energy projects delays the development of a broad and significant market, says Pedro Cruz, Director General of AMEEIER, a supplier of electric materials and equipment, lighting and renewable energy systems. “In Mexico, there are over 4 million users that could benefit from the implementation of small energy projects, but due to the lack of proper financing they cannot pay for them.”

Implementing energy efficiency before renewables is crucial to making the project more economic and therefore affordable, says Cruz. “If a renewable project is installed into an electric system without installing energy efficiency measures first, then the project's non-efficient consumption, will make it more expensive than it should be.”

When using technological products, it is also important to make sure that the system, be it focused on efficiency or renewables, offers the warranties clients require. Failing to do so is not just damaging a customer but the whole industry, says Cruz. “We have the obligation to offer the best technologies to our clients; we want them to know that they are truly supported and to do so we have developed strategic alliances with prestigious brands, like our partnership with Westinghouse, a company that offers world-class equipment with good warranties.”

When implementing technologies, it is worth noting that every client has a different need. There are certain technologies from which one client could benefit more than another. AMEEIER is looking forward to implementing integral solutions that include not only more than one renewable source but also diverse energy-efficiency technologies to offer tailored solutions to its clients. “Our projects offer integral solutions that include energy efficiency and clean energies. We are working on hybrid PVwind energy prototypes to provide constant energy beyond sunlight hours and with the best performance.” 

Committed to the development of Mexico, AMEEIER is also pushing for the inclusion of a new financing strategy that would allow small energy consumers to get the kind of projects they need. “We are fighting strongly for the creation of a renewable-energy public trust that could be used as a tool for small consumers who are otherwise not able to finance renewable projects, mainly due to the long ROI periods. Our studies demonstrate that with this trust, approximately 5.7GW of renewable generation could be installed in Mexico through small energy projects of around 5kW.”

A 5kW renewable project is costlier per kW installed than a 5GW project, thanks to economies of scale. Also, small consumers rely on subsidized tariffs, making the ROI period longer. Cruz says the relationship between academia, government and private institutions is critical. “Having the trust endorsed by members of technical, engineering and economic colleges would make the final user and the private sector certain about the system. AMEEIER has advised and supported institutions such as the Ministry of Energy, CONUEE and CRE regarding the creation of the public trust. These institutions have already drafted an outline and now are looking for members from the private sector to support it.”

Cruz sees a big opportunity in using the trust to support SMEs and basic educational institutions, both of which are segments that are lagging behind in options to become more competitive and cost-efficient. “Even though SMEs are one of the main sources of jobs in the country, they are also have to work the hardest to survive. Implementing energy solutions for them, through the trust, would help them become more competitive and offer more business opportunities to the country,” he says. AMEEIER estimates close to 100,000 schools could easily get 5kW projects with the trust, totaling 5MW of potential generation. “Installing energy projects in schools has an extra social benefit since children can witness how the energy that they consume is produced on-site with renewable energies. It is a win- win situation for the country,” Cruz says.