by Tyler Hoyle
In 2014, Mexico approved promising energy reforms, which predicted a 9 billion dollar increase in investments in the electric power sector by 2019. Mexico was anticipated to lead the market growth in Latin America. Yet two years later, solar growth is slower than predicted. Mexico struggles to adjust to catch up with the country’s growing demand for power. On January 27th-28th, Greentech Media held a two-day long Solar Summit in Mexico City to analyze the risks and opportunities of Mexico’s future in the global Solar market. Greentech posted an article shortly after the Solar conference [https://www.greentechmedia.com/articles/read/an-illustrated-guide-to-mexicos-solar-market] to try to explain Mexico’s solar market. Why has Mexico’s solar market growth declined? And what obstacles must Mexico overcome to fully reach its potential in the future?
Although Mexico finally has a competitive market to sell into, it is still in its infancy stages. The first electric power auction, which is open to outside bidders, is not until March 31st. Panelists at the Greentech summit believe that a general confusion about policy and regulatory uncertainty is one of the biggest challenges to the growth of unity-scale solar, followed by a lack of competitiveness and availability of capital. Regulations regarding solar power are in a constant flux.
Many projects for 2016 have been delayed as solar developers and financiers attempt to understand how and when to participate in the market. For example, Bernardo Fernandez, Hive Energy’s director of Mexico operations, anticipates that the first auction in March will be messy. Fernandez, like many other solar companies, would rather sit out and watch how the market evolves over the next year, before making a long term commitment.
Mohair Anand, a senior solar analyst at Greentech Media believes that short term pain will lead to long term gain. Over time the competitive market will create more opportunities for utility scale solar; and create a larger range of auctions, spot markets, and capacity markets. According to Anand, as solar costs continue to decrease, it will be better positioned to compete directly with any resource in these markets.
Evidently, the new market has potential to be very exciting – that is if everything goes as planned.
Critchley, Adam. “From Narcos to Natural Gas, a Solar Developer Considers the Risks of Mexico’s Solar Market.” Www.greentechmedia.com. N.p., 26 Jan. 2016. Web. 29 Jan. 2016.
Critchley, Adam. “Optimism for Mexico’s Solar Roadmap Despite Market Headwinds.” Www.greentechmedia.com. N.p., 29 Jan. 2016. Web. 29 Jan. 2016.
Lacey, Stephen. “Mexico’s Solar Market: Short-Term Pain May Bring Long-Term Gains.” Www.greentechmedia.com. N.p., 27 Jan. 2016. Web. 29 Jan. 2016.