The most publicized solar story out of Mexico recently may have been the 130 kilowatt array of Uni-Solar photovoltaic laminate that Enel Green Power installed on the rooftop of the Moon Palace, in Cancun, the site of the Nov.29 – Dec.10 COP16 UN conference on climate change. According to Mexico’s Secretary of Environment and Natural Resources, Hernando Guerrero, the array was intended to »set a precedent that all COPs should entirely neutralize their carbon impact,« an ambitious, if not quite yet a realistic, goal.
The event that didn’t get so much press, and not a lot of attendance either, happened two months prior to that in Guanajuato, where leaders of Mexico’s photovoltaic industry attended the 34th annual National Solar Energy Week conference to talk about the challenges and hopes of making their country Latin America’s biggest solar market – not only as a manufacturing and exporting powerhouse, but as a leading domestic user of solar energy as well.
As Alain Garnier, the general manager of Arizona, US-based Saint-Gobain Solar Glass N.A., told a diminished crowd of about one dozen listeners at the end of the conference: »If you want to develop a PV market in Mexico, you have to open that market [domestically]. Investment in Mexico will happen because there is a local market.«
It was a message that solar installers, investors and lobbyists here know well. And one which, it seems, is finally starting to be listened to.
The expansion is now
The growth of Mexico’s solar industry has in fact happened quickly over the past year, which saw an additional 1.5 megawatts of PV capacity installed, bringing the national total to about 25 megawatts. Now, megawatt projects are suddenly becoming more commonplace: 1 megawatt arrays were recently announced in both Agua Caliente and Acapulco; a 5 megawatt system, planned in Sonora, is only awaiting the stamp of approval from Congress; and a 12 megawatt CPV plant has been contracted in Aguaprieta. And the numbers are expected to climb dramatically in the year that follows.
As Mexico’s solar market expands, so too is ANES furthering its reach. At the conference, the association announced the opening of several new regional offices, increasing in size to 22 chapters and reflecting the industry’s growing confidence as it looks ahead at 2011.
The group’s new branch that opened in September in Laguna, for example, is seeing a boom of interest in solar energy from businesses competing in the industry-heavy northern states of Durango and Coahuila. »It’s a strategic point of trade – all transit passes through there – and the industries’ goals right now are to advance through solar,« said Eduardo Gonzalez, the regional ANES representative. From Mexico’s largest milk producer, Grupo Lala, to the heavy machinery makers Caterpillar and John Deere; the cement conglomerate Cemex; the meat processor Tyson, and the giant beer company Grupo Modelo, corporate giants in this part of Mexico are showing a new thirst for PV.
»They’re very interested because [they recognize] that it’s profitable to install systems. They ask us to visit them, to give advice on what capacity and type of solar they can install. Now, they’re just waiting for Mexican subsidies to help in this process,« said Gonzalez, who added that solar training courses have also begun recently in the nearby city of Torreon.
Subsidies – or rather the lack of them – is certainly one of the challenges holding back Mexico’s solar industry. PV advocates won a battle in April of 2010 when the government, in reaction to market forces, extended the permitted installation limit from 30 to 500 kilowatts. According to the Federal Electricity Commission’s (CFE) director of energy projects, Hernando Reynoso Navarro, who spoke at the conference, Mexico’s energy market would already tolerate issuing payments of more than 30¢ (23 euro cents) per kWh of solar energy produced. But the current law in Mexico »obliges us to search for the cheapest form of energy, and solar still doesn’t compete with other technologies,« he admitted. »We need some changes in energy policy that still haven’t come.«
Some newcomers advance
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One of the strongest module makers in Mexico, Kyocera, arrived at the Guanajuato conference posting impressive numbers. Several weeks before, in September, the firm installed a 100 kilowatt system on the rooftop of its Tijuana manufacturing plant, where modules built for export sell to Europe and the US at approximately $2.40 (1,84 euros) per watt. With a monthly production of 10MW, or 45,000 modules at the facility, some say it’s only a matter of time before Mexico’s own consumers take advantage of the domestic PV market.
»Even with no incentives aside from net-metering, we see the market in Mexico starting to grow with larger projects,» said Kyocera’s director of market development, Cecilia Aguillon. Aguillon suggested that Mexico should learn from Germany to model a successful – and, above all, reliable – feed-in tariff. The common complaint she hears from Mexican investors is that »we don’t have visibility, we don’t have clarity, we don’t have certainty in the market.«
Offering payments starting even as low as 20¢ (15.3 euro cents) per kWh, without the risk of overheating the market, would be enough to stimulate growth on a vast scale, she said. »If you could do a feed-in tariff [like that] over five years, I can guarantee that you will have a market that will explode here.«
And aside from global firms like Kyocera, some homegrown Mexican manufacturers and installers are on the move here as well. Two national module makers, Solartec from Irapuato, and ERDM-Solar from Veracruz, have already established a brand name and are advancing rapidly in the industry. (Solartec produced some 4 megawatts in 2010 and is looking to triple that amount in 2011; with the domestic PV market expected to rise quickly, said General Manager Gisela Alvarez, »we don’t want to be [just] a PV module maker – we want to be an energy generation company, with the advantage of making our own modules so we don’t depend on a third party.« Last summer, the firm started to do just that, installing three leased PV systems of between 100 and 300 kilowatts each on department stores in Guanajuato, Jalisco and Queretaro states.)
Meanwhile, the three-year-old Guadalajara-based integrator, Greenergy, with only eight employees, has jumped into the mix installing residential and commercial systems using ERDM modules because, according to marketer Vicente Cobarubias, »we want to support the national industry.«
»We’re seeing that there isn’t yet much of this technology developed here [and] one of the ways to grow the domestic market is to support it, to invest in it,« he said. The firm was recently contracted to install a $2.7 million (2,1 milliones de euros) PV installation of 350 kilowatts on a government building in Guadalajara. It’s companies like his, added Cobarubias, that will gain from the upshot in the domestic PV market. »We’re waiting, like many, for the boom.«
A spark of enthusiasm
But if Mexico is to seize its moment under the sun, it must be willing to make some adjustments, leaders here say. Guanajuato’s Governor Juan Manuel Oliva Ramirez spoke enthusiastically at the conference about the country’s need to »forget localisms,« and for regional governments to »assume a leadership as facilitators« in order for solar to advance through the market.
David Renne, a former solar irradiation expert with the National Renewable Energy Laboratory and the current president of the Freiburg, Germany-based International Solar Energy Society, told audiences that government incentives and open markets are both essential for the success of photovoltaics in Mexico – a country already well-situated for trade with its northern neighbors, the US and Canada, through deals like NAFTA. »The fundamental mechanisms are already in place for strong collaboration in the North American solar market,« said Renne. Now, »It’s just a matter of reinforcing these mechanisms [by] removing barriers and expanding that market.«
With oil and gas supplies dwindling, current electricity prices reaching from 15¢ to as high as 21¢ (11,5 to 16,1 centimos de euro) per kWh, and electricity rates increasing 10 percent annually (or 130 percent over the last 10 years), Mexico stands to gain big both at home and abroad through newer, stronger legislation that favors solar power, speakers at the conference said. From the goal of installing 10 megawatts of PV in 2010, the country now has its eyes on some 80 to 90 installed megawatts by the end of 2012. Indeed, said Arturo Morales Acevego, who has been researching PV for three decades at the National Polytechnical Institute, Mexico stands at a crossroads:
»We’re still at a moment in which we could be PV cell makers like the Chinese or the Europeans – and not just the producers, but consumers too. We have the conditions, the technology, the personnel. The only thing that’s required is the investment,« he said. »We’re still at that point, but within a few years maybe we won’t be; we’ll be dependent on the external technology instead of having our own production.
»A country that produces [PV], produces wealth. A country that buys products is dependent. We’re going to stop being a dependent country and produce wealth.«