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46 47 Sofos Energíawas started by three young,entre- preneurial engineers.“Theyhadapassionfor renewable energyandsolar energyandtheystartedtheirown business,”Pijuanrecounts.“Thepurposeof thecompany was todevelopand install solar systems indifferent buildings.Theywere lucky,inthat theSpanishgovern- ment,at the time,had incentives topromote theuseof renewableenergies,especiallysolar.” Those incentives,called feed-in tariffs (FITs),were developed in Europe in the early2000s in order to accelerate investment in renewable energy technol- ogies.Under a feed-in tariff,eligible renewable elec- tricitygenerators,including homeowners,business owners,farmers,and private investors,are paid a cost-based price for the excess electricity theycreate and then supplyback to the grid. “Sofos’clients were able to invest in installing sys- tems on their roofs,on their properties,on their lands -and all the energy that theywere raising from those systems,could be sold back to the grid at a higher rate thanthe retail price,”Pijuanexplains.“For example, if acompanywaspayingfor energyat$.14,thegovern- mentwaspaying,totheclients,$.45.So,itwasa really goodbusiness.Thatmodel started inGermany,and thenSpainadoptedthatmodel,then later,Italy,France, andsomeother countries implementedthiswayto incentivize the use of renewable energy.” However,feed-in tariffs often include“tariff de- gression,”amechanismaccording towhich the price paid ratchets down over time.This is done in order to trackand encourage technological cost reductions– weaning developers and users fromsubsidized pay- SOFOS JAMAICA ments as themarket matures and prices come down.And theymayalso be subject to political machinations; theycan be lowered,withdrawn, or abolished by legislation,which is what hap- pened in Spain in 2013,when after four reduc- tions in FITpayments,the government scrapped the programentirely in a bid to savemoney. “From2004 until 2008,the incentives were in place and the peoplewere crazyabout them,” says Pijuan.“The companywas doing a lot of projects in Spain.That helped us to growquickly. Three employees grewtomore than 100 doing multiple projects.After theycut the subsidies,we saidwe have tomaintain the installations that we’ve done,but we need to open newmarkets. Other European companies were going to South America,SouthAsia,SouthAfrica,andwe had professional contacts in countries like the Do- minican Republic.So,we said that was a perfect market; theyhad high energycosts and they have incentives.Maybewe could do self-con- sumption systems there.Self-consumption means that during sunnyhours,we could gen- erate power within the building,and if we had excess power,we could sell it back to the grid at a reasonable price.So,we established our first branch outside of Spain,in SantoDomingo.The branchwas a success; we didmultiple projects and then some of our clients who had hotels in different areas–Mexico,the Dominican Republic, and Jamaica-asked us to study the viabilityof doing solar systems in these threemarkets and whichmarket didwe thinkwe should imple- ment,first.”