Solar Panels Made in Mexico

While the nascent solar PV market gains ground among renewables, the need to develop a local industry value chain remains hurdle. “To date, there are 10 local solar PV manufacturers in the country. Together, these companies add up to an annual production capacity of 1.5GW. But these market players are working at 15 percent of capacity, which should be seen as a negative signal for the market,” says Javier Romero, Executive Director of the Mexican Association of Photovoltaic Equipment Manufacturers (AMFEF).

Solar panels are the only element of the value chain that is manufactured in Mexico, but there is an untapped opportunity to locally produce other components that are involved in this process. “Elements like glass, aluminum and some electrical components in the junction box and ribbons could be manufactured in the country. The Mexican industry has the requisite capabilities, but everything is being imported.” According to Romero, these industries are willing to participate in strengthening the value chain, but require larger volumes to do so.

For this to take place, both the Ministries of Energy and Economy are in discussions to propose the development of productive value chains. “We could define purchase volumes and guarantee demand to manufacturers,” says Romero. “Even taking some steps back along the value chain, the idea of developing national silicon and wafers is also on the table. Regarding mounting systems, these structures are being used in the utility-scale market. The idea is for this industry to migrate toward distributed generation or exportations,” he adds, emphasizing that greater efforts are needed to deploy a national solar PV industry.

Romero says the federal administration aims to prioritize both national companies and investors, but these measures are not by decree. “While the industry needs to support the solar market’s growth, we also want an even playing field for national manufacturers when competing against international players. In the majority of cases, exports include unfair trade where subsidies and dumping make these panels more affordable. Nevertheless, this price difference is not that sizable and if we introduce a percentage of local content that serves as a differentiator, we could be promoting local industry without affecting the solar PV industry as a whole,” he says.

AMFEF is comprised of seven companies, and five are solar panel manufacturers. “At a national level, there are ten solar PV manufacturers. We established some dialogue to join forces because it is very difficult for a new player to get involved in the promotion and lobbying of a local industry. Now all the national module manufacturers are part of the association.” says Romero. Companies such as IUSASOL, Solartec, Solarvatio and Solarsol are some of the players participating in this mission.

In 2018, industry associations such as AMFEF, AMIF and ANES presented an initiative to create a NOM. This goal of the framework was to regulate the quality of equipment, mainly solar panels and inverters. “The truth is the past administration did not consider this aspect as a priority and thought it could be regulated by market forces. In this sense, the current administration has shown more disposition to establishing fair competition between national and international companies, either through a NOM or governmental programs,” Romero says. AMFEF would like to support these efforts with both local and federal governments.

“We already approached the Direction of Renewable Energy of the Ministry of Energy and it is a great supporter of involving local content in important projects like the Solar City program. At the federal level, working together with CFE, we could reach up to 30GW of additional capacity through distributed generation. Considering the cancellation of the long-term electricity auctions, there is much potential in this industry segment,” Romero adds.

Better financing options are also needed to support the industry’s ambitions. “We want to involve more financial institutions in this discussion to foster the deployment of more distributed generation projects with national content. This participation does not only involve development banks, but private players as well.” Romero emphasizes that gaining the end-user’s confidence is the first step. “Technology needs to be understood to be used.”