Ricardo Silva Torres
General Manager
ESPS
/
Insight

Meeting Energy Demand with Solar Power

Mon, 10/21/2013 - 16:41

It is widely considered that growing demand for renewable energies will lead to a worldwide boom in the renewables industry in the coming years. Given that energy costs in Mexico are relatively high, Mexico has a very good and reliable solar resource in many locations in Mexico’s northern mining states, and as the cost per kWh of solar energy has dropped dramatically over the past years, this renewable energy source is becoming increasingly attractive for mining companies. Whilst it is unlikely that a solar project will ever be able to supply 100% of the energy required by mining operations – energy consumption on mine sites is extremely high and a solar plant that could meet these requirements would take up a significant surface area – solar power can become an important component of a company’s energy mix. “One thing that we show to our clients is how much the cost of electricity has gone up over the past decade. By investing in solar energy, a company is essentially guaranteeing a fixed energy cost for decades while Mexican electricity prices are forecasted to continue rising,” says Ricardo Silva Torres, General Manager of ESPS. Some mining companies are reluctant to install solar power because the initial investment is significant, and it can take companies upwards of three years to start earning a return on investment. However, once the initial investment has been paid back, the savings will be very large because the maintenance cost of solar panels is relatively low. In addition, tax incentives are available in Mexico. “The government has introduced an initiative whereby companies can deduct 100% of their investment in renewable energy from the taxes that they pay in one fiscal year – whatever has been invested. If a company invests MX$1 million in solar energy it can therefore deduct this amount from its taxes and create its own power supply,” explains Silva Torres.

ESPS was born out of the conviction that there is a great market opportunity for solar power in Mexico. After some pilot testing showed the significant cost reductions that could be made over time just by switching to solar power, the company took on its first clients in 2012. Silva Torres says that the company’s progress since it was founded would not have been possible without the expertise of its team, which includes an electrical supplier, which has allowed the company to maintain low costs; a mining company; and Dr. Rafael Cabanillas, a solar energy specialist from the University of Sonora. ESPS draws on the experience of its own team to design its solar installations. “ESPS provides the customer with an executive plan that shows the constructions they already have on their land, and how the solar panels will be integrated into their existing infrastructure,” says Silva Torres. “ESPS designs the project and it goes through Dr. Rafael Cabanillas, who refines the details of the project and ensures that the right panels and system configuration have been selected. Afterwards the installation is supervised directly by ESPS.”

The ESPS solar system works in parallel with the electricity that the company receives from the CFE, which brings a number of benefits. “If through its solar panels a company produces more energy than it uses, it supplies the electricity to the CFE which deducts the amount from future energy consumption during one year. That makes ESPS’s smaller projects more efficient. The electricity that is produced but not consumed during the winter months can be saved to power the air conditioning during the summer, when solar panels do not produce enough electricity to meet demand,” says Silva Torres. Another beneficial feature is the fact that a company can have a large solar project in Sonora, and consume the energy it generates at its offices in Mexico City. “So it is possible for a company to install a bigger solar project here, taking advantage of the solar resource, and consume the electricity in other locations,” he explains.

Since 2012, when ESPS was established, eight or 10 other solar energy companies have followed suit and started up in Hermosillo. The company has acted quickly to corner the market, and is confident that it will stay ahead of the competition based on its partnerships. “The founders have been aggressive in their investments to make sure that the company is built on strong foundations. ESPS is also the only company to have Dr. Rafael Cabanillas on the payroll. He is an expert in solar energy and is invited to every solar event in Mexico to talk about how the industry is developing,” says Silva Torres