When Edoardo Dellepiane and Raffaele Sertorio founded Niko Energy in 2023, they saw ample opportunity in Mexico’s underdeveloped solar market. Despite the fact that many parts of the country are bathed in sunlight, it has strikingly few solar installations.

After more than a year of helping solar installers sell, plan, and finance panels for residential and small commercial building owners, they spotted another opportunity: building Mexico’s first virtual power plant.

Demand for power is surging in Mexico, and multinational corporations have been itching to build more factories in the country, provided they can get access to reliable power. But Mexico’s grid is stretched thin, and blackouts were widespread last year during a drought that hobbled hydropower. A virtual power plant, or VPP, aggregates and controls things like home batteries, thermostats, and EV chargers. Controlling how much power those contribute to or draw from the grid could help ease the pain.

“We have seen the new government put a lot of attention to this problem,” Dellepiane told TechCrunch. “We want to be the company that manages the biggest portfolio of decentralized energy resources in Mexico.”

The plan is to continue to finance new solar installations, said Andrés Marquina, Niko’s head of strategy. The number of projects Niko has serviced has grown 20% month over month, the company said. To build its VPP, it’s also starting to sell battery storage to current solar owners and is looking to acquire portfolios from companies interested in selling assets. The company is aiming to amass tens of megawatts of capacity at the outset, Marquina said.

The renewed focus on Mexico and the VPP initiative represent a shift from the company’s previous strategy, which envisioned copy-pasting its solar installation offering across Latin America. “We saw that Mexico is a huge untapped opportunity, so [we are] focusing on one country and doing it well before we move on to other parts,” Sertorio said.

Previously, Niko sold mostly to homeowners and small businesses, which the founders said were underserved by other companies. The startup plans to continue pursuing those customers, but more recently it has also begun to court larger companies.

Similar to what it offers smaller customers, Niko will finance and facilitate the installation of solar panels for a large business. The contract is essentially a fee-for-service, which in this case is electricity. It can be canceled at any time, Dellepiane said, at which point Niko uninstalls the solar panels. But given that Niko expects companies to save on their energy bills, the startup doesn’t think that will happen often. “It gives them peace of mind,” Dellepiane said.

To facilitate more installations, and to develop the VPP platform, Niko has raised an $8 million in equity, the company exclusively told TechCrunch. The round was led by QED Investors with participation from 468 Capital and Picus Capital. The company also raised $15 million in debt.