Experts Fear That Uncertainty Prevails in Solar Energy Sector

Industry experts fear that the Mexican solar sector is currently experiencing unprecedented levels of uncertainty, as the energy reform awaits its Congress vote and a rupture in the technology’s supply chain stability complicates the accessibility of solar technology.

Over the past two decades, solar energy has proven to be a viable option for countries like Mexico, in need of making the drastic transition to clean energy to meet the commitments established by the international community. The relatively cheap component costs were indicative of the untapped potential that solar could offer to the Mexican market. Karla Cedano, President, ANES, revealed that although solar has generated a lot of growth over the years, it is currently experiencing uncertainty due to the proposed energy reform, which has the potential to drive away investment. According to analyst company Kroll, between US$30 billion and US$50 billion worth of investments are currently stagnant due to the uncertainty caused by the government’s drive to establish a new energy reform.

Cedano added that the uncertainty mainly comes from ongoing legislative dialogues that show the disregard authorities hold for the potential of solar energy. She asserts that authorities should not legislate without analyzing the current state of energy in Mexico. Cedano furthermore concludes that the uncertainty is not only caused by this issue: the invasion of Ukraine, the energy shortage that followed, and the perception that this crisis will last indefinitely are other factors that contribute to the instability.

Nelson Delgado, Managing Director, ASOLMEX, said that the uncertainty stems from a "lack of public policy regulating the sector,” recognizing neither the great potential of solar energy nor the ways that the energy reform could jeopardize its development. He added that no solar power system in the country is saturated. On the contrary, virtually all regions, have great unexplored potential that is yet to be exploited, particularly in the Bajio.

Delgado is confident that solar energy will overcome the setbacks due to the existing demand in the market. “For the first time in history, the lower costs of solar energy [compared to fossil fuels] make it one of the most viable solutions to make the transition toward the decarbonization of electric systems,” commented Delgado. This vision is shared by other industry leaders, such as Daniel García, President, FAMERAC, who pointed out that up to 26 percent of the world's installed renewable energy capacity is based on thermal solar power.

Overall, experts are waiting on the verdict on the energy reform while hoping that this will not hinder renewable energy development. José Navarro, Managing Director, Tarsus Mexico, said that the country could very well become a “world power” in solar energy since about 85 percent of Mexico’s territory has good potential to use solar energy.