Main Theme
Sub-theme: Solar energy; rural communities; off-the-grid; B-Corp
Abstract
According to the International Energy Agency (IEA), as of 2020, approximately 2.6 million people in Mexico still lacked access to electricity. This number represents about 2% of the country’s population. The regions with the least access to energy are mainly remote and rural areas in the southern and southeastern parts of the country. According to the Mexican government’s National Energy Strategy, the states with the lowest electrification rates are Chiapas, Oaxaca, Guerrero, and Veracruz, located in the southern part of the country. These areas have historically faced challenges in providing reliable and affordable access to electricity due to their remote location, rugged terrain, and low population density.
However, a company in Mexico aims to tackle this problem: “Iluméxico.” Iluméxico is a social enterprise that was founded in 2010 with the mission of bringing clean, affordable and sustainable energy solutions to rural and marginalized communities in Mexico that lack access to reliable electricity. The company mainly focuses on providing off-grid solar power systems to households, schools, and health clinics in remote areas of the country.
Since its founding in 2010, Iluméxico has achieved several significant accomplishments in the field of renewable energy and sustainable development in Mexico. Some of its achievements include providing solar power to over 20,000 households in rural and marginalized communities throughout Mexico while improving access to electricity for thousands of people who previously lacked it.
Sustainable Development Goals Chart
Main Highlights
Problem
- Approximately 2.6 million people in Mexico still lack access to electricity.
Context
- In Mexico, the lowest socio-economic decile is called “energy poverty,” a concept used to describe the lack of total access to electricity and the services and amenities that the energy brings.
- Rural communities are often not attracted to national electricity grids, hindering the opportunities for the people who live there and holding back progress.
Solution
- Iluméxico was founded in 2009 as a solution for those in Mexico without energy access. They provide electrical services to marginalized families in Mexico via solar technology.
- The company has achieved providing solar power to over 20,000 households in rural and marginalized communities throughout Mexico
Impact statement
- By 2025, Iluméxico aims to provide energy to 1 million people living in rural and remote areas in Mexico. This means that Iluméxico could potentially give access to energy to one-third of the Mexican population without access to energy by 2025.
Systems perspective
- The challenge doesn’t end when communities have access to energy. There is a significant difference between having access to energy and enjoying the services and amenities that the energy brings with it.
Recently, the government has partnered with Iluméxico to keep providing energy for those in need. And while public-private partnerships are a good solution for unsolved problems, one could raise a question: Has the Mexican government take responsibility in this situation, or is Iluméxico acting as a response to the non-effectiveness of the government?
Case Overview
- In Mexico, 2.6 million people live without access to energy.
According to the International Energy Agency (IEA), as of 2020, approximately 2.6 million people in Mexico still lacked access to electricity. This number represents about 2% of the country’s population. The regions with the least access to energy are mainly remote and rural areas in the southern and southeastern parts of the country. According to the Mexican government’s National Energy Strategy, the states with the lowest electrification rates are Chiapas, Oaxaca, Guerrero, and Veracruz, located in the southern part of the country. These areas have historically faced challenges in providing reliable and affordable access to electricity due to their remote location, rugged terrain, and low population density.
Image: Main populations without access to energy.Source: Asolmex.
Many households rely on alternative energy sources like traditional biomass fuels such as wood, charcoal, and animal dung for cooking and heating, which can lead to serious health problems due to indoor air pollution.
Image: In Quintana Roo, Bernarda Tuz makes tortillas on the stove on her patio. All the households in her neighborhood cook their food with firewood, and most cook inside their houses. Source: Expansión
Without a doubt, solar energy is one of the most effective ways to bring access to power to the most remote and impoverished areas in Mexico.
On the one hand, Mexico has abundant sunlight, making it an ideal location for solar energy. On average, the country receives between 10 to 14 daylight hours, one of the world’s highest. This means that even remote areas with limited infrastructure can still generate electricity from solar energy.
On the other hand, solar energy is becoming increasingly cost-effective, making it a viable option for remote places in Mexico that may not have access to traditional grid power. The initial investment in solar panels and batteries may be higher, but the long-term savings on electricity bills can be substantial.
Figure: The falling cost of renewable energy. Source: Statista.
For those reasons, and knowing that private companies can significantly impact the public sector, Manuel Wiechers founded a social company called Iluméxico.
- Iluméxico: A social company that aims to provide energy access to Mexico’s most remote and impoverished areas.
Iluméxico is a company that designs, installs, and maintains solar home systems, microgrids, and other clean energy solutions to provide electricity to people not connected to the national grid.
Manuel Wiechers founded the company in 2009, and everything began when Manuel was a student at the Faculty of Engineering of the National Autonomous University of Mexico (UNAM).
When Iluméxico was founded, solar energy was less widely known than today. While he knew that solar energy could dramatically improve the quality of life of people living in rural parts of Mexico, he did not have enough resources to undertake his project.
Image: Manuel Wiechers. Source: Forbes
After knocking on several doors, he and his group decided to enter a sustainability contest in which they won first place with the prototype of their “Prometeo” equipment. Thanks to their innovative prototype and business model, they won over USD 32.000. They formally began research, production, and development of equipment that captures solar energy with a photovoltaic cell panel, transforming energy into a battery that can provide energy to electrical devices.
- How does Iluméxico work, and what is the innovative business model?
Iluméxico designs, manufactures, and installs solar energy systems tailored to each community’s needs, considering factors such as the local climate, energy demand, and available funding. The company also provides ongoing maintenance and technical support to ensure that the systems continue to function correctly over time. The company mainly focuses on providing off-grid solar power systems to households, schools, and health clinics in remote areas of the country.
Iluméxico is a certified B corp. This means that they are a for-profit company that uses the power of business to build a more inclusive and sustainable economy. For example, when a family is interested in their services, one of Iluméxico´s members (often a local person hired by Ilumexico) visits the household and interviews them to analyze their needs. In that interview, they explore how much the household spends on alternative energy sources. Then a plan is created according to the needs of the family. The budget previously used to buy or make alternative energy sources will now be paid to Ilumexico to cover the prices of the equipment. This guarantees that the new equipment will be affordable for the families.
In addition to its core business of providing solar energy solutions, Ilumexico also works to promote energy efficiency and sustainable development in the communities it serves through education and awareness-raising activities. For example, the company offers training programs on renewable energy, climate change, and environmental conservation and works with local organizations and government agencies to promote sustainable development practices. The company has received several awards and recognitions for its work, including the 2014 Zayed Future Energy Prize, which recognizes innovative solutions in renewable energy and sustainability.
Impact Statement
As of 2020, Iluméxico has provided access to energy to more than 20.000 households, or more than 100.000 individuals. Their objective for 2025 is to have provided energy to 200.000 families, or the equivalent of 1 million people. This means that if everything goes as planned, in 2025, Iluméxico could have potentially solved the lack of energy of ⅓ of rural communities in México.
Iluméxico’s approach is to work closely with local communities to understand their specific energy needs and design customized solutions that meet those needs. The company also provides financing options to make its products more accessible to low-income families. It partners with local organizations and governments to help bring energy access to the most vulnerable populations.
Iluméxico also has an innovative method for charging for their services: whenever their services and solar panels are needed, they individually design a monthly fee equivalent to what that family spends on other energy sources or lighting like charcoal, candles, etc. And then they offer a permanent Solar energy service.
- In Mexico, the lowest economic decile is called “energy poverty,” a concept used to describe the lack of total access to electricity and the services and amenities that the energy brings.
- According to CNBC’s Sustainable Energy: “Generally families spend 10 percent of their income on alternate sources of energy, so it is that same amount that they now use for paying their installments over 12 months with Ilumexico”
- Today, more than 100.000 people benefit from the solar energy service provided by Iluméxico.
- According to CSR Wire, “The company plans to increase its “ILU Centros” support network from 5 to 50 locations nationwide and strengthen alliances with both public and private institutions. Anticipating up to 70 percent growth within the next five years, Iluméxico also plans to expand its business into two new Latin American countries by 2020.”
Figure: Rural offices of Ilumexico in the country. Source: Ilumexico.
Systems Perspective
During 2005-2010, the government implemented various programs to expand electricity infrastructure, including installing solar panels in remote areas.
But in some cases, the lack of maintenance and access to repair those solar panels left numerous families with unused electrical items because the solar infrastructure is now old and useless.
Image: Some inhabitants acquired electrical appliances when equipped with solar panels that no longer work today. Source: Expansión
Recently, the government has partnered with Iluméxico to implement programs to cover the cost of expanding electricity infrastructure, including installing solar panels and microgrids in some remote areas.
However, despite these efforts, a more profound situation lies beneath having access to energy or solar power. According to Rigoberto García Ochoa, a scholar at Colegio de la Frontera Norte (Colef) and one of the few researchers in Latin America who focuses on the topic of “energy poverty,”
“(…) one thing is having access to electricity, and another thing is when you can enjoy the services that electricity provides. And that is when the gaps widen even more, and inequality and the circle of poverty are generated”.
According to his latest study, to be published in the coming months, four out of 10 homes in Mexico live in a certain degree of energy poverty. The inhabitants of La Noria, in Quintana Roo, are the most severe.
Image: Narciso Nahuat shows the last document they sent to request electricity service access. The latter was addressed to President López Obrador and received by a member of his assistantship. Source: Expansión.
Yet, while public-private partnerships are a good solution for unsolved problems in some cases, one could raise a question: Has the Mexican government take responsibility in this situation, or is Iluméxico acting as a response to the non-effectiveness of the government?
Case by: 4Revs Researcher Christopher Brosse | April 2023
