Enormous potential of solar in Mexico requires a pro-active attitude from investors

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MEXICO CITY – After many years of lagging behind internationally, Mexico is slowly warming up to alternative energy sources. Foreign investors are looking with interest to Latin America's second largest economy, as this year will signify a further development of the market and mark the passing of an important energy reform, which is expected to open the sector to more investment from private parties. To Mexican solar entrepreneurs, 2014 therefore promises a vast array of new business opportunities.

Few countries in the Western Hemisphere hold more potential for solar energy than Mexico. With Global Horizontal Irradiation (GHI) averaging approximately 5 kWh/m2/day, only 0,06% of Mexico's national territory could generate sufficient electricity to satisfy the entire consumption of the country. And yet, solar PV is still only in its infancy in Mexico; it still only amounts to little over one percent of its energy matrix, and even though growth is healthy (with around four percent annually), there is limitless potential for the sector to grow. 

Investors expect 2014 to be an exiticing year for the sector, mostly because expectations for economic growth this year are very positive. Moreover, the Mexican government passed a sweeping constitutional reform last December that could potentially open the country's lagging and inefficient electricity sector.

“In terms of solar PV, Mexico represents a market that is still very 'early'”, says Thierry Lepercq, chairman of Paris-based Solairedirect. “One of the reasons why we are interested in Mexico, is because it is such a high potential market.”

“It's a very interesting moment for Mexico”, says Iván Michel, sales manager of Jinko Solar. “International agencies predict that anywhere between 100 and 250 megwatts of solar electricity production is possible, and there have already been tremendous steps forward in renewable energy. Just look at wind energy; some 2000 megwatts have already been installed.”

Both Michel and Lepercq will be participating in Solarplaza's El Futuro Solar: Mexico conference, heldon March 6th in Mexico City, which aims at bringing investors and specialists of renewable energy and solar together to create new opportunities for growth and investment.

Indeed, to take full advantage of Mexico's enormous potential, investors will need to be pro-active, says president Vicente Estrada-Cajigal of Mexican firm Solartronic, who will also participate in the conference. The country's energy market, especially with regard to renewable energy, is still very much a closed circuit. It is dominated by the state owned Federal Electricity Commission (CFE), which controls almost 60% of the market. 

According to Estrada-Cajigal, the CFE still has its doubts about intermittend sources of energy, due to the fear for possible complications it could have on its electricity grid. “We need to work hard to show that the impact would be minimal when intermittent sources such as solar are adequarely distributed”, he says. “Technical studies exist of other regions, but we'll have to do it on the particular case of Mexico as well, regarding its particular conditions and characteristics.”

El Futuro Solar: Mexico will be held in Mexico City fromon March 6th. The conference is part of the Solar PV Trade Mission Mexico, held between the 3rd and 7th of march. Heavyweights from the national and international solar industry will participate in the 5-day trade mission, such as SMA, Jinko Solar, SolarCity and Recurrent Energy.