Contributed article by Dominic Pasteiner

The recent blossoming of Mexico’s solar sector is just the starting point for an industry that has all the attributes required to become a leader in national energy generation, a group of industry leaders agreed Wednesday in Mexico City at the Mexico Energy Forum 2017.

“Just 12 months ago several individuals, including some leading public sector representatives, still thought of solar energy as an expensive resource that was inaccessible for the majority of consumers,” said Héctor Olea, President of Gauss Energía, during a panel discussion focusing on Mexico’s solar energy momentum at the Hotel Sheraton Maria Isabel. “But the power auctions broke that myth and now everyone accepts that solar is one of the most competitive sources of energy. It is not going away anytime soon.”

Olea was joined on the panel by Arturo Gomez, Vice President Project Finance of Buenavista Renewables, Rodolfo Flores, Country Manager Mexico, CA & Caribbean of DNV GL-Energy and Lou Marrero, Director Latin America & the Caribbean of Trina Solar. Mariana Jiménez, Senior Industry Analyst & Journalist of Mexico Energy Review, acted as the moderator.

While the momentum is encouraging, the panelists agreed that much work still needs to be done to ensure the solar market drive does not fizzle out in the coming months. For Gomez, the greatest threat to the participants in the solar market is a lack of education.

“Many companies outside the sector have an energy department but they do not fully understand the opportunity that the reform, the auctions and the new technology represent,” Gomez said. “Alongside customer service, this lack of information is what could hinder the development of solar energy in Mexico.”

Flores echoed Gomez’ concerns but noted that companies with a global presence such as DNV GL-Energy, are making a strong effort to introduce the most successful practices from other countries into Mexico.

“We understand that companies that have never worked in the energy sector will be a step behind more established players when it comes to operations,” he said. “We want to use our experience to support new players and advise them on how to maximize their capacity for storage and distributed generation.”

With the third power auction just around the corner, the panelists were undecided on whether solar prices will rise or fall in the coming months. While Flores and Gomez agreed that the new regulations will encourage technological developments and consequently drive down manufacturing and installation prices, Olea felt that a look at the bigger picture suggests a reversal could be on the horizon.

“The conditions are different now than they were during the first two auctions and I think we might be surprised,” he said. “Macro-economic uncertainty has increased substantially since last year, and this will surely drive prices up. I am optimistic that we can return to the prices of the first auction at least.”

One factor solar can always count on is a low-risk profile when compared to other energy sources such as fossil fuels and even competitive renewable solutions like wind. If investors need to be convinced about the potential of the Mexican market, all they have to do is look at the sky.

“Most of the world’s leading solar markets, like Japan and Germany, have much fewer sunlight hours than Mexico,” said Gomez. “It is the perfect place to develop new technologies.”

 

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