Mexico is committed to reducing greenhouse gas emissions and generating 35% of its energy from clean sources by 2024. This represents an opportunity for renewable energy investment. Two long-term auctions in 2016 attracted 34 companies to invest $6.6 billion and add 5,000 megawatts of clean energy capacity. Solar energy emerged as the most competitive due to Mexico's favorable geography for solar generation. With reduced costs, solar photovoltaic energy can now compete with conventional energy sources. Mexico has potential to be a major exporter of solar technology to the U.S. and Latin America due to its commercial openness and competitive manufacturing prices.

1. Negocios ProMéxico
56
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SPECIAL FEATURE — GREEN BUSINESSES & RENEWABLE ENERGY

2. November – December 2016 57
The world is witnessing a new phase of the energy sector in Mexico: with a greater
openness to private investment, unprecedented investments are being made in the
renewable energy sector.
OPPORTUNITIES IN THE SOLAR
PHOTOVOLTAIC INDUSTRY IN MEXICO
by juan carlos josé meade cantú*
Mexico is committed to reducing its greenhouse
gas emissions by 22%, setting the goal of generat-
ing 35% of its energy from clean sources in 2024,
and 43% by 2030. This represents a unique op-
portunity for companies interested in investing
in the renewable energy sector. With only the
beginning of the new Mexican electricity market
and the two long-term auctions that took place in
2016, already 34 generating companies will be set
up in Mexico. Combined, these companies are set
to invest around 6.6 billion usd, and will add 5,000
megawatts of newly installed capacity generation
from clean power sources.
Without a doubt, the auctions have been a
stimulus for the purchase of electricity and have
brought with them prices that compete at inter-
national levels. The results of the first two auc-
tions established solar energy as the most com-
petitive in terms of generation.
According to data from the International
Energy Agency (IEA), the sun could become
the largest source of electricity in 2050. In this
sense, Mexico has an advantageous geographi-
cal situation because it is in the so-called “solar
belt”; 85% of Mexican territory presents favor-
able conditions for the generation of solar ener-
gy, which places the country as the destination
with the greatest potential for the development
of solar energy projects in Latin America and in
third place, worldwide.
In recent years, the cost of solar panels and
other related components have been significantly
reduced; energy produced from photovoltaic
plants has lowered its cost to become competitive
when compared to that generated by convention-
al means. Mexico has enormous potential to be
a fundamental link in the global supply chain of
the solar photovoltaic industry. Thanks to its com-
mercial opening and competitive prices of equip-
ment manufacturing, the country is on its way to
becoming a major export platform to the United
States and Latin America, where there is high de-
mand for the sectors’ products and services.
It should not be overlooked, however, that the
industry still faces many challenges. Throughout
the world, efforts continue to find cheaper and
more abundant manufacturing methods and ma-
terials, and research centers are now prioritizing
bets on technology in organic materials. Added
to this is the need for quality transmission infra-
structure and, where appropriate, safe, economi-
cal and environmentally friendly storage systems.
The increase of funding sources, the cre-
ation of public programs for its promotion and
the development of road maps to define the di-
rection of the industry are all areas of oppor-
tunity for the improvement in competitiveness
in sector-wide projects. The IEA estimates that
Mexico can more than quadruple its installed
renewable energy capacity by 2030. Without a
doubt, photovoltaic solar power is positioning
itself today as an affordable method to produce
electricity with a low environmental impact. In
this sense, Mexico is at the forefront facing the
challenges and taking advantage of the benefits
presented by this unique sector.
*Deputy Director of Electricity and
Sustainability, ProMexico
Mexico has enormous potential to be a fundamental
link in the global supply chain of the solar photovoltaic
industry. Thanks to its commercial opening and
competitive prices of equipment manufacturing, the
country is on its way to becoming a major export platform
to the United States and Latin America, where there is
high demand for the sectors’ products and services.
GREEN BUSINESSES & RENEWABLE ENERGY — SPECIAL FEATURE