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Insight

Trust Essential to Open the Market

Wed, 02/19/2014 - 14:40

Sharp, the Japanese designer and manufacturer of electronic products, has over 50 years of experience in photovoltaic products and has made essential contributions to solar technology. “We decided to come to Mexico as part of our global strategy to boost solar energy. Also, we are trying to help the country reduce its CO2 emissions because we believe that it is our responsibility,” says Adolfo Sánchez, Director of Sharp Solar’s Energy Division. His company has made a strong bet on the commercial, industrial and residential sectors, with the latter being its strongest market. In order to address the growing demand for solar energy from the residential sector in the Mexican market, e2 Energías Ecológicas was created over five years ago in Jalisco. CEO Guillermo Corona is proud to work together with Sharp Solar’s Latin America Energy Division on project development. “Sharp acts as a manufacturer of solar panels and e2 Energías Ecológicas works as an integrator,” he explains. “One of our strengths in convincing clients is that we have the support of a very respectable company, the oldest still operating solar panel manufacturer. It is one of the rare companies to have been around for longer than its solar panels’ warranty.” According to Corona, the fact that Sharp provides solar panels for space missions carried out by NASA and Japan’s National Space Development Agency speaks to the quality of its products and its insistence on top-notch R&D. “It is very important to know that the components you use can guarantee the efficiency of the equipment for 25 years. Our production processes must enable the module to operate with at least 80% of its initial power,” he stresses. This is a crucial factor, considering that a solar park audit done in early 2013 revealed that 43% of manufacturers cannot guarantee even three years of operation. “Our products may be 30% more expensive but that buys you a guarantee of optimal performance.”

“e2 Energías Ecológicas was responsible for opening the solar energy market in Guadalajara, Jalisco, which was no easy task,” says Corona. “There are now over 30 companies offering these services, but competition has heightened public awareness about the benefits of solar energy and has broken down many barriers that e2 Energía Ecológicas faced when it began operating.” The company has transitioned from selling six systems in its first year, seen as a success at the time, to installing between 15 and 20 per month. 80% of the market is currently in the residential sector, a logical 

situation for Corona, since it has the highest electricity tariff in the Mexican market. The payback in this sector can take from three to four years, but the real incentive is in its 100% depreciation in the first year. The energy tariff is much lower in the industrial sector which makes large projects more complicated due to the larger CAPEX needed for construction. In order for solar energy to keep growing in Mexico, Sánchez believes the sector needs government incentives. He also mentions clients’ desires to have a faster return on investment than what is available right now. “I believe Mexico needs similar incentives to those in place in Germany and Japan, where anyone that installs a photovoltaic system, apart from investing in renewable energy, is motivated because the kWh is paid at twice the price. In the case of Mexico, people that are very environmentally conscious invest in solar technology, but the rest need government incentives.” To address the lack of knowledge in the country about PV systems, Sharp Solar is working on education programs to spread the benefits of this type of renewable energy. It provides training courses to CFE employees to improve their understanding of the solar energy industry and is also involved with academic institutions.

Corona views the current regulatory framework as a challenge for large solar power projects, given the need to navigate CRE’s approval process and CFE’s viability assessment on whether transmission lines can reach potential sites. Additionally, the Environmental Impact Assessment has to be obtained while social issues often prove troublesome. “The sector will only take off when large projects become a reality and the government provides incentives to the industry. We still have a long way to go in order for solar energy to reach 1% of Mexico’s total power generation,” states Corona.

However, if conditions change and the market explodes, e2 Energía Ecológica, with Sharp’s support, will be ready for whatever the industry requires. “For larger projects, we have enough expertise gained through 54 years in the sector. Our projects have technical support from professionals around the world. Also, Sharp has had a wealth of experience in repairing the damage that other companies have done, satisfying clients and keeping them believing in solar power,” Corona considers. Sánchez adds “We are aware that our growth is highly dependent on the market and other external factors, but we expect future incentives from the government and will definitely see higher growth. Our most important contribution to the sector is that Mexico has access to state-of-the-art photovoltaic technology.”