Solar energy has the power to dramatically accelerate energy transition, and yet, penetration of solar power is still low, even in countries with ample sunshine. This is the problem that Canadian-Mexican start-up Solfium set out to solve.
Fundamentally, the adoption of smaller-scale solar power generation has been hindered by traditional business models, says Andres Friedman, co-founder and CEO of Solfium.
Solfium is a solar start-up focused on facilitating the distribution of solar energy as an increasingly normalized source of electricity.
“It took a few decades for TVs to go from being rare in the ‘50s to something that you see in every home,” says Friedman. “If we think about the planet and our environmental challenges, we don’t have five decades for sustainable technology adoption to happen. That’s why we’re focused on accelerating that adoption through a more user-friendly customer experience.”
Friedman developed the idea for Solfium with two friends, who later became co-founders. Juan Osuna is a Mexico-based solar industry veteran that Friedman met in Querétaro, where Friedman was working with Bombardier. Later, while completing an executive masters at the London School of Economics and Political Science, Friedman met Zach Magnan, who was then the head of finance of Oryx Petroleum in Geneva.
The desire to make solar power more accessible brought the threesome together to launch Solfium in 2020.
Solfium is focused on distributed generation—initially, small-scale projects for residential and smaller commercial applications. The company chose Mexico as a launch market, given its low solar penetration.
“If we were to rely only on large utility-scale projects to manage our energy transition, we would not meet our net-zero targets by 2050,” he says. “We think that distributed generation needs to be a bigger part of the mix.”
The uber of solar power
To accelerate the adoption of solar energy, Solfium developed an easy-to-use mobile application that provides a quick estimate of the costs and benefits, turnkey installation.
“In eight simple steps, you can have solar panels installed in your home,” says Friedman.
Users get an instant quote by inputting their electricity bill, and based on the location of their home or business and the solar forecast, are provided a quote and financing options. The customer can then manage the installation and after-sales support through the app.
“The system pays for itself with your savings, whether you pay for it upfront or you’re financing it, the unit economics are amazing,” says Friedman.
The average payback period for customers ranges anywhere from two to five years, and decades of free electricity follow once the system is paid off, according to Friedman.
Depending on the consumer’s usage pattern and location, systems may be able to pay for themselves faster. In Mexico, one of the countries with the highest solar PV potential, systems produce a lot more kilowatt-hours. Systems with two to three panels can power a small house.
Greening the value chain
With the ESG incentive, more and more companies are looking toward developing their net-zero roadmap. In addition, the U.S. Securities and Exchange Commission (SEC) presented earlier this year rules that would make climate-related disclosures mandatory for publicly traded companies.
According to Friedman, solar energy is the key lever to a successful sustainability strategy—a fast-growing market.
Responding to these market dynamics, Solfium has now added industrial-scale projects to its portfolio and helping businesses decarbonize their value chain, from employees to suppliers, for meaningful impact.
“There’s no other initiative that you could implement in just a few months that can have such massive impact on your CO2 emissions reduction,” says Friedman. “Anything else that you need to do as part of your net-zero roadmap usually requires a bigger investment and a longer payback period.”
A win for the environment
After 18 months of operation, Solfium is gaining increasing visibility in Mexico. The start-up recently signed a strategic alliance with the government of Queretaro to deploy nearly $125 million US of distributed solar energy projects across the state in the next five years. Both the Canadian embassy and the Quebec Government Representative in Mexico have been very supportive and were in attendance at the event to announce the partnership.
As its business grows in Mexico, the company is now attracting the attention of Venture Capital firms, who see the potential to target additional global markets.
Visit our sponsors
Wise (formerly TransferWise) is the cheaper, easier way to send money abroad. It helps people move money quickly and easily between bank accounts in different countries. Convert 60+ currencies with ridiculously low fees - on average 7x cheaper than a bank. No hidden fees, no markup on the exchange rate, ever.