When Financing Disrupts a Technology MarketWed, 02/21/2018 - 11:55
Q: How is Galt disrupting the Mexican market?
A: We offer the highest added value in the residential sector. To help further develop this segment, Galt has created its own fund to finance residential projects. Its strength lies in its flexibility compared to financing options offered by banking institutions. Flexibility is achieved in two ways: first, we use different eligibility criteria besides a potential client’s credit history, which is the key factor for traditional financing. Second, and most critical, Galt can reuse the panels for another installation. What would be a capital loss for a bank is a capital transfer from one project to another for Galt. Our goal has always been to find ways to make solar energy more accessible for all customers, both by making it more affordable and easier to finance. We expect that in the future, and thanks to the fund, Galt will be able to offer solar projects to the base of the pyramid: those with the lowest income and consumption but who are also those who would receive the greatest benefit from the installation of solar panels.
Q: How does Galt choose its suppliers?
A: In the beginning, we chose more economical options to gain a competitive advantage, but through trial and error we have recognized that the best route is to offer topquality products that, although they might have a higher upfront cost, create a truly high-quality project over the long term. We now choose suppliers because they do things right and provide high quality. One of our most important requirements when selecting a supplier is its openness. Instead of a supplier that claims to be perfect, we want someone who is committed, with a thirst for improvement and who wants to grow together with us.
Q: How are Galt's partners enabling it to widen its market?
A: For companies that are betting on green initiatives and adopting renewables, it makes sense to provide their employees with options to install renewable energies in their homes. The first company to which we offered a partnership was CEMEX two years ago. We proposed preferential payment and price schemes to their employees and in exchange we were able to participate in fairs, conferences and other events in which CEMEX either takes part or organizes. This strategy not only increased our sales volume but also decreased clientacquisition costs, allowing us to offer 15 to 20 percent discounts to clients acquired through this partnership. CEMEX employees who participate in the scheme save money by reducing their electricity costs. This became a win-win situation for all parties involved. So much so that we have expanded this strategy to almost 15 companies, including Banamex, Banbajio, Pepsi and Banorte. We are still adding new partners to the list and are happy to have as many as possible.
Q: How has Galt’s ASOLMEX membership impacted its market position?
A: Galt has been a member of ASOLMEX for the past two years. The association has been successful in reaching governmental entities such as CRE and the Ministry of Energy to offer constructive input about their activities. It is worth noting that these institutions have been respectful and open to all of our input. When CFE acquired legal protection against the interconnection rules published by CRE, ASOLMEX sat down with CFE. Instead of burning bridges we looked for a way to fix the problem. CFE was not able to handle so many interconnections in such a short time. After those talks, both CFE and the companies involved in distributed generation were ready to keep working together.
Q: What goals does Galt have for 2018?
A: We want to reach those customers who have the lowest incomes. To achieve this long-term goal, we are focusing on growing and capitalizing the company, building more creative financing schemes and developing software that will not only make O&M easier but also foster client acquisition. We will close 2017 with around 1,200 installations and want to reach a minimum of 3,000 installations by the end of 2018.