SolarCity made its first international acquisition after entering a definitive agreement with ILIOSSON, S.A. de C.V. to acquire ILIOSS for $15 million.
ILLIOSS is one of the largest commercial and industrial solar developers in Mexico.
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Solar City plans to pay $10 million in cash for ILLIOS and additional $5 million if the Mexican solar developer meets the energy storage project installation goals, according to Marco Krapels, senior vice president of global strategies and global expansion of the American solar energy company.
ILLIOSS will operate as in dependent business unit of SolarCity following the completion of the transaction. According to Krapels, ILLIOS will receive additional payments from SolarCity upon meeting certain solar installation targets. He did not disclose the amount of the potential additional payments.
ILLIOs Chairman David Arelle and COO Manuel Vergara will lead the business unit as president and general manager, respectively. Arelle and Vergara co-founded the Mexican solar developer. Mr. Arelle supervised the development and construction of thousands of homes in Mexico as private homebuilder before establishing ILIOSS in 2012.
SolarCity has the opportunity to dominate the solar power market
Solar City believed that Mexico is one of the most promising solar markets around the world due to a combination of factors including high electricity rates, favorable solar economics and massive solar resources.
“Mexico is an exciting market for us. We believe we have an opportunity to dominate that market in the same way that we dominate the market in the U.S.,” said Krapels.
On the other hand, SolarCity CEO Lyndon Rive noted that there only a few solar power projects in Mexico and estimated that the installation rate is only around 5MW to 10MW per month. He projected that the company’s growth in Mexico will probably be faster than in the United States because it is not required to obtain construction permits. He added that the process of connecting solar to the grid in Mexico is easier than in the United States.