Spain's Solaer seeks 10% of Israel's PV market

Ignacio Arganza Alvaro: Israel has near perfect combination of sunlight, low rates, and regulatory stability, and most of all, available money.

The founder and CEO of Spanish renewable energy pacesetter Bosque Solaer SL, Ignacio Arganza Alvaro, wants to win 10% of Israel's photovoltaic market within five years. In an interview with "Globes", he explained why he came to Israel.

Solaer is a company which started out with €3,000 in shareholders' equity achieved more than €200 million in sales within four years, building photovoltaic facilities in Spain, a country at the forefront of the global solar energy industry. Solaer took off between 2005 and 2008, thanks to unprecedented Spanish government incentives and subsidies, until the country's solar energy industry became saturated. The company is now seeking new markets in other sun-drenched countries, including Israel.

"Germany, the world's largest solar energy market, is too competitive. France is interesting in terms of tariffs, but it is fairly limited. In contrast, Israel reminds me of Spain in 2005. Israel is at the same latitude as the Canary Islands, and the sun here produces 15% more than in Spain.

Solaer is also in talks to make large investments in India and Bulgaria. The company is conducting a feasibility study in India, while in Bulgaria it has already signed contracts to build solar energy facilities for the production of 25 megawatts of electricity. Solaer's Israeli branch will be a partner in two projects.

Back in 2005, Alvaro sought out business partners to build solar energy facilities. "No one at the time understood what we were talking about. You had to explain to landowners how photovoltaic technology worked and how silicon cells turns sunlight into electricity. They simply didn’t believe that this was scientific technology. We began recruiting photovoltaic engineers and other professionals in the field. I told them, 'You don’t know what you have in your hands. This is gold, and we're going to sell it like crazy'."

While Israeli entrepreneurs believe that the country's bureaucracy is the worst in the world, Alvaro is more sanguine. "Your regulation is all right. You're a fairly stable country. There's a near perfect combination of sunlight, low rates, and regulatory stability, and most of all, available money.

"There's a credit crunch all over the world, and the banks don’t want to see entrepreneurs. The banks here are sending a different message. The pie is big enough for everyone."

"Globes": What about the political situation?

Alvaro: "It's true that it's difficult to persuade Spanish investors to make direct investments here because of what they see on television. We, however, have an investor in the company who wants to invest in Israel, because he is a Jew."

Solaer set up a local subsidiary Solaer Israel Ltd., headed by Alon Segev, to handle its operations in the country. Segev, a photovoltaic industry veteran, is a partner in the subsidiary.

Most solar energy facilities in Spain are land based, while Israel does not even yet have outline plans for building such facilities. Isn't that frustrating?

"It's true that the big money is in land, but we realize that it is difficult to build such facilities in Israel right now. We're in no hurry. We're starting small, we'll move on to mid-sized, and then we'll reach the big time. There's huge potential here, and as far as we're concerned, if we achieve a 10% share of the Israeli market within five years, we'll be very pleased."

Published by Globes [online], Israel business news - - on September 6, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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