A sunny future for Mexico

Jan 14, 2013 12:00 AM

The scorching hot Sonora Desert in Northern Mexico isn't exactly a hospitable place for human beings, but some consider it a goldmine. According to experts, a mere 25 square kilometers could provide enough solar energy to supply Mexico's 114 million inhabitants with electricity.

Mexico is the perfect place to invest in solar energy; Global Horizontal Irradiation (GHI) averages approximately 5 kWh/m2/day. In fact, a June 2009 GTZ report indicated that 0,06% of Mexico's national territory would be sufficient to generate the entire electricity consumption of the country.

Moreover, Mexico has an open economy, which has shown remarkable resilience despite a severe backlash from the international crisis in 2009. Growth amounted to 3,8% last year, with similar figures expected for 2013. Its geographical advantage as the United States' nextdoor neighbor and its plethora of free trade agreements attract investors from across the globe.

To get those investors to turn their attention to solar is one of the main topics of SolarPlaza's El Futuro Solar: Mexico conference, held in Mexico City. Such a boost in interest is certainly welcome, because for all its mouthwatering potential, Mexico's potential is still largely untapped; in 2011 solar power only amounted to one per cent of the country's energy matrix.

"We're at the very beginning of formalizing the market", explains Carlos Flores, CEO of Conermex, a Mexico City-based company specialized in renewable energy solutions. He will be one of the speakers at El Futuro Solar: Mexico. According to mr. Flores, there are still few incentives for investors in terms of subsidies or injection tariffs. "One of the problems is the cost of solar power for private users with high levels of consumption; the industrial sector pays much less."

The administration of president Felipe Calderon, who left office in December, did make some headway in making the market more attractive.

April last year, congress approved a clean energy law that requires renewable energy generation to grow to 35% of total output by 2024. Moreover, through the prestigious National Autonomous University of Mexico (UNAM) the government is attempting to establish the exact solar potential the country actually has.

So far, solar development has largely focused on small scale projects providing rural communities with off-grid electricity, but interest in larger projects is growing.

Mexico boasts a robust manufacturing industry, exporting a whopping 350 bilion USD worth of consumer goods per year. With the United States as its neighbor and fellow member of the North American Free Trade Agreement (NAFTA), the manufacturing of solar panels is one of the major investments possibilities in years to come.

Still, manufacturing for other countries is only one step. Mexico's domestic market also needs to be developed, which is why mr. Flores feels El Futuro Solar: Mexico is an important event. "It's important to tell the investors what's going on, to give them precise information", he says. "In the end, we expect the cost to generate solar power to go down, while conventional means will become more expensive. It's a very attractive market to invest in."

El Futuro Solar: Mexico will be held in Mexico City on February 28, as part of the International PV Trade Mission: Mexico. Carlos Flores will be joined by other speakers such as Gabriela da Rocha Oliviera (Head of Latin America Research and Analysis, Bloomberg New Energy Finance) and Robert Pfatischer (CEO of Meteocontrol)

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