If you are selling generators or energy equipment in Puerto Rico, DACO Law 107-2019 is not optional. It is the regulatory framework that governs how you sell, how you service, and how you support your customers — and the companies that treat it as a compliance checkbox are making a strategic mistake.
I led the development of Generac's DACO compliance strategy for Puerto Rico. Here is what I learned, and why I believe compliance is one of the most important competitive advantages available in this market.
What DACO Law 107-2019 actually requires.
The Department of Consumer Affairs (DACO) in Puerto Rico enacted Law 107-2019 in response to the energy crisis that followed Hurricane Maria. The law establishes specific requirements for companies selling generators and energy equipment in Puerto Rico, including warranty obligations, service response standards, dealer certification requirements, and customer disclosure mandates.
The intent of the law is to protect consumers from companies that sell equipment and then disappear when the equipment fails. It is, in many ways, a response to the behavior of companies that flooded the market after Maria with equipment that was not properly supported.
For companies that are serious about the Puerto Rico market, DACO compliance is not a burden. It is a baseline.
Why most companies get this wrong.
The most common mistake I see is treating DACO compliance as a legal exercise rather than a business strategy. Companies assign it to their legal team, get the paperwork in order, and move on. They miss the strategic dimension entirely.
DACO compliance is not just about avoiding fines. It is about building a dealer network that is certified and accountable. It is about establishing service standards that protect your brand when equipment fails — because equipment always fails eventually. It is about creating a documented framework that gives customers confidence in their purchase and gives distributors confidence in their partnership with you.
When I built Generac's DACO compliance strategy, I approached it as a market positioning exercise. Every element of the compliance framework was designed not just to meet the legal requirement, but to create a competitive advantage: a certified dealer network that competitors could not easily replicate, a service infrastructure that raised the bar for the entire market, and a customer-facing warranty and support commitment that became a reason to choose Generac over anyone else.
"Compliance becomes a moat. And moats are worth building."
The competitive moat.
Here is the strategic reality: DACO compliance is hard to do well. It requires investment in dealer training, service infrastructure, parts availability, and documentation systems. Most smaller competitors do not have the resources or the organizational discipline to do it properly.
That means that companies which invest in genuine DACO compliance — not just paperwork compliance, but operational compliance — create a barrier to entry that protects their market position. Customers who understand the law will ask their dealer about compliance. Dealers who are properly certified will prefer to work with manufacturers who support their compliance obligations. Utilities and government agencies that are evaluating large infrastructure purchases will require it.
Compliance becomes a moat. And moats are worth building.
What I would tell any company entering Puerto Rico.
Do not wait until you are required to comply. Build your compliance infrastructure before you need it, and build it properly. Invest in dealer certification, service training, and parts availability. Document everything. Treat DACO not as a regulatory obstacle but as a framework for building a business that customers can trust.
The companies that do this well will own the Puerto Rico market for years. The ones that do not will spend those years dealing with customer complaints, regulatory issues, and a reputation that is very hard to repair on an island where everyone knows everyone.
I have seen both outcomes. The investment is worth it.