Solar Energy as a Service for Local Employee Communities – Mexico

This activity leases photovoltaic solar electricity systems across Mexico. Capital expenditures and operating risks are thus eliminated, while savings are provided for residential, commercial and industrial customers. The goal is to lead Mexico’s transformation from a carbon-based electricity market to one with a broad mix of renewable energy sources.

Fast facts:

43-square-meter installation area;
9,395 kilowatt hours guaranteed annual production;
6,692 kilograms of carbon dioxide avoided per year.

The problem

Although sunny Mexico is ideal for the development of solar energy, this remains out of reach for most Mexicans. Interest rates in Mexico have historically been high, limiting lending that might spur investment in solar. This has hindered the development and growth of the middle class and the country in general. About half of Mexicans are considered poor. Mexico also has a very young population, which creates further challenges – including a large number of unskilled laborers – which could deter the country from developing and becoming more prosperous.

The solution

The private company Envolta in 2012 established the “solar energy as a service” segment in Mexico. Since then, it has been successfully deploying high-quality, cost-competitive solar photovoltaic systems across the country. Through utilizing a leasing model, upfront cost – the single biggest obstacle for people who want to use solar energy – is eliminated.

The project also innovated a credit surety product to help mitigate risk associated with customer default, making assets more attractive to what is currently a limited pool of capital. Corporate partnerships are also key for attractiveness to investors.

Helping the planet

Solar leasing can provide clean energy to tens of thousands of Mexican households. This would mitigate the release of greenhouse gases, improve air quality and promote greater awareness of the importance of the planet’s health to human lives.

Helping people

Customers enjoy rooftop solar for no initial investment whatsoever and benefit from immediate cost savings on their monthly electric bill. The installation of rooftop solar increases real estate values, provides predictability on future electricity rates for customers and creates local jobs. Envolta and its corporate partners engage employees at the workplace and reward them with cash rebates as program milestones are achieved. The installation of solar energy systems has proven to be effective at creating job growth where high unemployment and low wages are serious challenges.

Scaling up

As the solar project evolves and provides strong risk-mitigated returns to investors, credit markets will become more competitive, making capital costs fall and causing the solar market to further expand. Greater access to capital will also allow other companies to introduce similar solar energy services, and likely further innovate on this approach. The activity hopes to be a catalyst for change across the Mexican solar industry by demonstrating a viable solar financial model, which will benefit all participating in the market.