Photo credit: Black Rock Solar photovoltaic array at Food Bank of Northern Nevada by BlackRockSolar
Mexico’s geographic location and solar resources have made it one of the top candidates for solar energy development. However, till 2012, the number of investors in this industry and government support was limited. Now, despite its thriving oil industry and an upcoming offshore drilling treaty with the US, Mexico’s solar energy is growing steadily and strongly.
Up till recently, most of Mexico’s clean energy was produced by hydroelectric stations while wind and solar energy combined produced less than 1.5% of the power. With local and foreign companies receiving permits for 215 megawatts of solar plans, over 40,000 homes in the country’s sunnier northern regions will receive ample power and Mexico’s solar capacity will increase by fivefold.
By opening its energy sector to foreign investors after 75 years, Mexico has lured in more than American oil companies. US-based First Solar Inc. along with German Saferay GmbH and Spanish Grupotec Tecnologia Solar SL have bought projects in Mexico. As for local efforts, local investor Gauss Energia has opened a photovoltaic plant in September, which is the largest in Latin America. Through it, Gauss Energia plans to “open the way for the development of the photovoltaic sector”.
Gauss Energia’s plans appear to be successful as Mexican states Coahuila and Oaxaca have started pushing solar PV projects of their own by the end of October. The state legislature of Coahuila passed a resolution to sign a 15-year power purchase agreement with Parque Solar Coahuila to create a solar park that will cover the energy needs of the state government and Torreon and Matamoros’ municipal governments. Private and local firms will fund the entire project.
As for Oaxaca, Chinese company Hareon Solar plans to invest $250 million in a solar park and solar panel factory. “The production of solar panels would be done in the Tehuantepec Isthmus,” said Oaxaca’s Minister of Tourism and Economic Development Jose Zorrilla de San Martin Diego. “From there they would take the product to other countries and power generation would happen in Costa Chica.” The project is currently waiting for approval from the Comision Federal de Electricidad. Once initiated, it will generate 1,000 jobs in the Tehuantepec Isthmus, which is where a majority of Mexico’s wind power is generated.
Experts believe that more funding and power purchase deals are required for the market to take off. With deals in hand, price points will be established and investors will be given the confidence required for the market to boom. However, local Gauss Energia has introduced an alternative funding model called self-supply. Through it, developers can sign long-term power purchase contracts with non-state companies to buy electricity at a fixed price. This model has already attracted a few parties, including Ford Motor Co., which in June signed up to purchase 3 megawatts from a future 20 megawatt solar plant in Sonora.
Mexico is expected to generate 35% of its energy from clean resources come 2026. The Energy Minister predicts the production of 2,170 megawatts by 2020.