The largest solar installer and financier in the U.S., SolarCity, is breaking out of this country for the first time in a major way. On Wednesday the company announced that it plans to acquire Ilioss, a solar installer focused on building out solar panels on the rooftops of businesses across Mexico.
SolarCity agreed to buy the four-year-old company for $10 million in cash, and another potential $5 million related to deployment milestones. The firm was co-founded by entrepreneurs David Arelle and Manuel Vegara.
SolarCity’s Senior Vice President of Strategy and Global Expansion, Marco Krapels, told Fortune in an interview that Mexico is a “super exciting” market, due to its high utility electricity rates, ample sun and close proximity to the U.S. Mexico could also provide a jumping off point for moving further into other countries across South America, like Brazil.
Ilioss has built a business off of working with some of the largest Mexican retailers. The company partnered with grocery and department store chain Soriana for the past several years and has installed solar panels on the roofs of its stores.
Like SolarCity, Ilioss offers low cost financing for customers that want to go solar quickly and it charges companies monthly electricity rates that are cheaper than the local utility. SolarCity plans to first work with Ilioss on the commercial and industrial market, and sell to residential customers down the road as well.
SolarCity CEO Lyndon Rive told Fortune that Mexico is also an interesting new market because the country, unlike the U.S., is seeing increasing demand for energy as its economy and middle class grow. The U.S., on the other hand, is only seeing anemic energy growth, pointed out Rive.
SolarCity is also looking to grow its market share in the face of an increasingly competitive, difficult and consolidating market on its home turf. SolarCity is still the largest solar installer in the U.S., but with new competition from the combined entity that is SunEdison and Vivint Solar, new growing player NRG Energy, and a newly public Sunrun, SolarCity is looking to differentiate and compete aggressively in every way it can.
SolarCity is run by brothers Lyndon and Peter Rive and their cousin Elon Musk, who’s also a major investor.
Updated to correct that Ilioss has not installed solar panels on hundreds of Soriana stores. Soriana has hundreds of stores, and Ilioss has installed solar panels on a limited number of them.