Outlook for Mexican solar growth
The Mexican solar power industry is positioned for future growth.
Since passing sweeping reforms in the energy industry, an optimism over Mexico’s role in energy has been rapidly spreading. The country will most likely experience a more modest growth rate in the realm of Mexican solar development, but several factors point to a promising future for solar energy in the country.
Energy Reform and the Mexican solar industry
In recent years, Mexico has placed infrastructure and energy reform at the forefront of political priorities. The country has invested heavily in the newly privatized energy sector, new highways, rail infrastructure, etc. But much of this new focus has been focused on renewable energy like solar.
Though Mexican solar growth is prognosticated to be much slower than that of its neighbor to the north, Mexico has ambitiously determined by 2024 to produce a third of its energy consumed from renewable sources. For solar favorability, Mexico is ranked #43 among other nations, and large solar companies are gearing up to capitalize on the future of Mexican solar. Diversified domestic conglomerate, Grupo IUSA plans to invest around $200 million into a Mexican solar facility with a goal of producing 500MW annually, and a new Aura Solar plant recently opened in La Paz worth over $100 million.
In less than a year of passing the energy reforms in Mexico, this is clear evidence of their results. Today, according to, Mexican Secretary of Economy Idelfonso Guajardo Villarreal, the country has the best supply chain among emerging economies to manufacture photovoltaic panels.”
Factors Impacting Solar Growth
Mexico’s installed solar capacity is currently at less than 1 gigawatt, but is likely to triple in the next few years. At a recent solar summit in Mexico City, panelists predicted the primary obstacles and positive influencers for this growth.
Some see regulatory uncertainty as a concern. The Mexican solar regulatory framework is relatively young and unclarified in some aspects. Contributing to this concern is the unfair advantage held by the state utility, CFE, and how this advantage will be minimized or enhanced in the future. As a manufacturer for solar panels exported to other global markets, Mexico has the expertise and manufacturing ability for advancement in this sector domestically. A lack of competitiveness in the country is seen as a potential obstacle to future growth. There is currently a 15% import tariff on solar panels into Mexico to encourage domestic competitiveness in the industry.
Proximity is one of Mexico’s chief assets when it comes to manufacturing in general, and this proximity is to one of the fastest growing markets in the solar industry, the US, may prod the country to steady solar growth.