Mexico’s solar market: short-term pain brings long-term gains

Mexico’s installed solar PV capacity is currently at less than 1 GW and in all probability, only 2 to 3 GW will be added by 2020. Until recently, Mexico represented the most promising solar market in Latin America. But the strong growth expected for the country is now much less certain. In fact, solar installation figures in 2016 could be 36% lower than those projected last year. So what has happened? As GTM Research has documented, solar project developers and financiers are dealing with a completely new set of rules for selling solar electricity into Mexico’s energy market. Those new rules are causing some confusion and, as such, activity has slowed down.

For the first time ever, the country actually has a competitive market to sell into. Over the last couple of years, the Mexican government has been working on a plan to overhaul the state-owned electricity provider and build a wholesale market to encourage competition. The new market was launched this January and auctions will take place over the coming months.

Almost everyone sees Mexico’s transition to a competitive market as necessary to meet the country’s growing power demand. But as energy suppliers grapple with the new rules (some of which have still not been finalised or are confusing), there are many eager solar companies and investors sitting on the sidelines, trying to figure out how and when to bid into the market. Read more…

Stephen Lacey
Managing Editor, Greentech Media

Article published in: FuturENERGY January-February 2016