Erco is the result of key factors that have been aligned to deliver value to energy users and capture value from the electric market. In this article, I will share four relevant aspects that have been united to succeed: a strong origin of the cofounders, a merging renewable energy market with great potential to be discovered, to grow by implementing technology and a great team, and the current complementary activities in the electricity market with ambitious but achievable goals that attract investors.
The origin: two cofounders
This is one of the best parts of this journey. Erco was founded by Juan Camilo López and Juan Esteban Hincapié in 2012 as part of a subject assignment at the University of EAFIT while they were studying Mechanical Engineering. The dream started. The lack of funding and the size of the renewable energy market in Colombia were the main challenges to making this business profitable. The solution was very smart: go for the F (family). Therefore, uncles, aunts, cousins, and even mother-in-laws and father-in-laws were the first customers. In fact, the first projects are still generating The secret: López and Juanes were and are really good friends. This is the first time that Erco has had a press release.
The market: law 1715 of 2014 and solar PV lease
The missing piece of the equation was the Colombian renewable energy market. In 2012, Colombia was in the stone age of solar PV energy. From 15.000 MW of the total installed grid capacity, 2MW were solar PV, mainly streetlights with solar; this was a sign of a blue ocean for Erco and a sign of no ocean at all for other actors. Nevertheless, the law 1715 was signed in 2024, and that made renewable energy a business case. It took almost three years to fully regulate this law. Meanwhile, Erco was working on a solar PV lease with the financial institutions and generating a pipeline of potential customers that might be interested in reducing their energy bills while promoting a new technology for self-consumption for early adopters. And at the end of this phase, Erco signed the biggest C&I (commercial and industrial) project in Colombia. The secret: Bosi's 100 kWp Solar PV Project was the first C&I Erco customer to apply for the benefits of Law 1715 and the Solar PV Lease; moreover, Bosi has been getting free press from this project since 2016.
This is the announcement of the project: Bosi instala paneles solares en su planta
The growth: Market differentiation
There were many good companies already installing solar PV in Colombia, some bigger than others, and in 2018, after 5 years of commercial operation, ERCO has already differentiated itself in a competitive market by promoting clean, affordable, and digital energy. This was a new concept.
In fact, there are three aspects that were relevant at this stage:
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From the beginning, Erco has been profitable as a company with an "A team" able to execute a defined, unique, and ambitious business plan. This is different from other start-ups that had a great business plan but underperformed in execution.
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Erco was the first EPC solar contractor with its own remote monitoring platform "Erco Cloud." It was developed in-house. This allowed the customers to see in real time their savings, CO2 emission reductions, generation, and status.
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It was very important to have more commercial offices in other cities and countries to increase the market cap and reduce the operational costs. Therefore, Erco opened offices in Cali, Bogotá, and Barranquilla and expanded its operations to Panamá and San Antonio, Texas operational costs. Therefore, Erco opened offices in Cali, Bogotá, and Barranquilla and expanded its operations to Panamá and San Antonio, Texas. This made the company more competitive by visiting potential clients and installing projects.
These points above were crucial to attracting potential investors willing to support the growth of a new company in the cleantech sector in Colombia. The secret: For the cofounders, it was clear that the investment was important, but it was more important to concentrate on recruitment and the culture of the company.
This is the announcement of one milestone: Epm le sigue apostando a la energía solar
The vision: present and near future
Currently, Erco has consolidated its operations as a group of companies with complementary activities in the electricity market. This means an EPC contractor, generator, AO&M, and electricity retailer. As a result of these complementary activities, some investors went on board. (https://www.latinfinance.com/daily-briefs/2023/2/2/erco-raises-funds-for-solar-plants).
Below, we describe the vision of these business units:
EPC (Engineering, Procurement, and Construction): The EPC division was the original idea; it has the scope to build solar roof tops in residential and C&I, plus the capacity to build solar farms bigger than 10 MW. By 2023, the results will be upstanding: more than 80 MWp of C&I sector has been built, 40 MWp of utility scale has been built, 80 MWp of utility scale is under construction, and there is a pipeline of more than 300 MWp.
Generator: This means generating renewable energy from our own power plants. This is based on the development of greenfield projects until "ready-to-Finance" and the M&A of solar photovoltaic projects. By 2023, Erco will have 100 MWp of pipeline projects with a COD (commercial operation date) before 2024. This energy will be sold to the Colombian energy market with green credits. The goal is to have at least 400 MW of power generation before 2027. AO&M (Administration Operation and Maintenance): This is a business unit that has been operating for our own projects and for third-party projects. Normally, it includes remote supervision of the system, cleaning, preventive maintenance, and corrective maintenance routines with qualified and certified staff. By 2023, this business unit will have 70 MW of long-term contracts with the asset owners.
Retail: NEU is the first digital electricity retailer in Latin America. It uses technology to optimize the user’s energy consumption and deliver electricity with green attributes. It started as a spin-off inside Erco, and by 2023, it will be the third non-independent retailer in the Colombian market. By 2023, NEU will supply energy to more than 500 users.
This is one of the news stories about this business model: Clientes de NEU ahorran en su factura de energía
All in all, Erco is the result of key factors that have been aligned to succeed. These factors can be summarized along a timeline in four points:
- Firstly, the origin This means that knowing your business partner before starting business is a good sign.
- Secondly, the market In 2025, while some actors found no ocean at all, Erco identified a blue ocean by being the first company to implement Law 1715 benefits and a solar PV lease with a local bank.
- Thirdly, Growth. Erco was different by having a grow strategy and consolidating a great team, implementing technology, and promoting digital energy.
- Finally, the vision, the complementary activities in the electricity market, and the desire to have ambitious but achievable goals have translated into an attractive company for investors.
