Spain’s booming renewable energy market is attracting the attention of an unlikely retail segment: mobile phone companies. Phone firms including national leader Telefónica are jostling to offer clean energy alongside more traditional products such as broadband connections. 

Telefónica launched a solar line around a year ago, according to internet-of-things product manager Santiago Díaz-Mor Bautista. The offering is aimed at corporate customers looking to reduce their carbon footprint, Díaz-Mor told GTM in an email. 

Elsewhere, Spain’s fourth-largest operator, MásMóvil, this month bought the clean energy provider Lucera, which has 100,000 clients in Spain, for an undisclosed sum. 

The purchase followed a December 2020 partnership between MásMóvil and Lucera, allowing the mobile company to offer 100 percent renewable energy supplies to residential customers under a newly created EnergyGO brand. 

MásMóvil’s Portuguese subsidiary Nowo also launched an energy offering in January, making it the second operator in Portugal to deliver electrons alongside mobile services.

In 2016, MásMóvil bought the Spanish mobile challenger brand Pepephone, which has been selling clean energy via its PepeEnergy subsidiary since 2015. MásMóvil intends to continue selling energy separately under the PepeEnergy, EnergyGO and Lucera brands, according to reports

Meanwhile in 2019, Orange — Spain’s second-largest operator by number of subscribers — was also reported to be eyeing energy sales, although the current status of the company’s plans is unclear. 

A boom brought on by the end of the sun tax

Díaz-Mor said interest in commercializing energy products had risen since the end of 2018 when the Spanish government axed an unpopular "sun tax" regulatory regime that acted as a strong disincentive to install rooftop solar. 

“This led to a series of benefits for those wanting to bet on renewable energy and self-consumption,” Díaz-Mor said. 

At the time, Telefónica’s business division was already selling internet-of-things technologies for remote management of corporate lighting and air conditioning, and monitoring of water, gas and electricity. 

Growing interest in cleaner, cheaper energy led Telefónica to introduce a turnkey solar self-consumption service for warehouses. 

“Our energy self-generation solution for warehouses is being very well received, not only with clients for whom we offer other solutions but also for new ones,” Díaz-Mor commented. 

Beyond installing rooftop solar systems, Telefónica provides maintenance and other energy-related products, including efficiency audits and consumption monitoring. Batteries are not yet part of the portfolio, said Díaz-Mor. 

The move into clean energy comes as Iberian mobile phone companies, much like those in other parts of the world, fight to deliver profits in the face of fierce competition and stagnating average telecommunications revenue per user. 

Providing new services not only brings new revenue to phone operators but also helps to lock in customers within a market where churn is a major threat to profitability. Energy is just one of a range of new services, from banking to home security, being touted by Spanish phone companies.  

Leveraging large customer bases and favorable finance

There are good reasons why phone companies might want to sell energy, Carlos García Buitrón, CEO and founder of the green power retailer Ecovatios, said in an email.  

“I think it makes sense because [telecom companies] have a key part of the equation that you need to be successful: a major customer base,” he said. “They have also got the tools for financing, client service, scoring [and] product and service bundling.”

For solar installation services specifically, a key challenge for mobile phone companies would be to pick quality installers and pay them enough to do a good job, he said. 

This view was echoed by José Donoso, general director of the Spanish photovoltaic union (Unión Española Fotovoltaica or UNEF). “It’s good that PV is being used more widely, as long as it’s done well,” he said in an interview. “At the end of the day, we’re talking about an electrical installation.”

UNEF is in the process of developing a certification scheme for installers that would help customers make sure PV systems meet all relevant safety criteria, he added. What seems clear is that there could soon be more mobile phone companies queuing up to sell solar systems in Spain. 

While Spain’s mobile market grew at a sluggish 2.8 percent a year between 2013 and 2018, according to Telefónica’s Fundación Telefónica foundation, the solar self-consumption market shot up by 30 percent in 2020 alone, based on UNEF data. 

“We’re seeing spectacular growth in the residential market,” Donoso said. “People who haven’t been laid off because of COVID-19 are saving more, so we’ve seen household savings rates of 30 percent compared to an average of 8 percent. And right now you can earn more money by investing it in a panel on your roof than by putting it in the bank.”