Solar would be an attractive alternative energy option for Mexico’s many small businesses, which face high prices from electric utilities. But solar adoption has been hampered by market fragmentation, quality issues and lack of financing.
“You have a high variability in the quality of the service and of the hardware offered, and as a result, some customers were happy, a lot of customers were not,” said Andrés Friedman of Mexico City-based Solfium.
The company’s solution is integrated financing, installation and performance monitoring through a digital platform. Its goal is to improve the solar experience for small business owners and encourage greater adoption.
Solfium has closed a $10 million Series A equity round led by Accion and Bogota-based impact investor ALIVE Ventures. The impact investors were drawn to the company for the “opportunity to access solar energy, but also access to credit,” ALIVE’s Lina Moya told ImpactAlpha. It helps small businesses reduce their costs, “making them more productive, being able to reinvest the savings that they were generating,” she added.
“Technology and embedded financing can combine to help fuel the growth of small businesses and the wider economy” Accion’s Gabriel Isaza de Larrañaga said. “By connecting small businesses, installers, and financial partners within one ecosystem, Solfium delivers clean energy to its customers and connects them to the formal financial system”
Kamay Ventures also participated in the round.
Solar growth
The slow growth of Mexico’s solar sector is also due to the fact that there are few subsidies and incentives to fuel the market, as there are in many other countries.
Friedman described the environment as “gradual but constant.”
Solfium’s platform aims to standardize an otherwise informal, confusing and unreliable process of obtaining rooftop solar. Users receive instant quotes, connect with certified local installers and secure credit to finance the installation. The software then allows for ongoing performance monitoring and maintenance.
Solfium’s approach is similar to international peers like Sunrun in the US, which has expanded rapidly alongside the growth of the country’s residential solar market. The company says it has installed more than 36,000 panels with a total of 25 megawatts of capacity since launching in 2021.
“Our growth is grounded in economics, not political cycles or short-term incentives,” Friedman said.
The Series A round will support expansion both in Mexico and new markets.
Corporate suppliers
Solfium’s growth strategy involves working with large corporations working to decarbonize their value chains. With Coca-Cola, for example, Solfium is assisting with solar adoption at corporate facilities as well as for the thousands of small retailers and suppliers in its network. It has similar arrangements with several large Mexican banks.
The model delivers benefits on both sides of the equation, Friedman told ImpactAlpha. “If Coca-Cola helps a convenience store be more efficient and grow and sell more, that’s a commercial opportunity for Coca-Cola, right? When you’re helping your supplier, you’re reducing your operational cost.”
