Strengthening Links in Solar Value Chain

Q: What were AMFEF’s major milestones in the PV sector in the last year?
A: Primary PV manufacturing companies Solartec and IUSASOL continue to lead AMFEF’s business but our association has welcomed new, smaller members that also manufacture PV equipment in Mexico. As a result, our membership now totals seven companies. Our members’ primary business target is distributed generation, given companies participating in the WEM need to comply with a certain degree of bankability. In recent years, the emphasis on bankability has hampered the creation of competitive advantages by pioneering companies in the renewables energy sector.
Financial data and media company Bloomberg established a set of prerequisites to be considered a Tier 1 PV company. The bankability chapter of these prerequisites now require a larger PV project portfolio, international presence and a certain seniority as an operational player in the PV market. New Mexican companies are finding it difficult to meet these prerequisites, fostering unfair trade as only a handful of companies are awarded the Tier 1 status. Still, Mexican companies increased their sales in the distributed generation sector in 2017, representing a cumulated participation of 40-50 percent of market share. Expectations remained high after the publication of the General Administrative Provisions and the new net billing and total sale schemes, but no contract has been signed so far under either of these schemes. Mexican PV manufacturers continue to acquire new technologies and machinery to remain up-to-date in PV manufacturing processes, regardless of the challenges.
Q: How is AMFEF working to strengthening Mexico’s PV value chain?
A: AMFEF is focusing its efforts and interactions with the Ministry of Economy’s Value Chain Directorate on broadening the PV value chain. This is especially important since the majority of the materials required for manufacturing are imported, including glass, aluminum, EVA, string materials and solar cells. One of AMFEF’s member-companies, Solarcell, developed its own solar cell manufacturing facility in Mexico when China’s manufacturing boom is at its highest and an entire panel can be imported at a price lower than Mexico’s local manufacture costs, 15 to 20 percent lower than what they sell them in China. In this context, US President Donald Trump’s 30 percent import tariff is no surprise, although it applies on a global scale for all the US’ commercial partners, hindering Mexico’s national PV manufacturing market. AMFEF is pushing for Mexico’s own tariff on Chinese solar panels, which is set at 15 percent, to mirror the US tariff.
Q: What is needed for Mexico to develop a PV installation standard?
A: In February 2017, together with the National Association of Solar Power (ANES) and the Mexican Association of the PV Industry (AMIF), AMFEF presented to CRE’s Standardization Directorate a petition to draft an Official Mexican Norm (NOM) dedicated specifically to PV system installations. The idea is to prevent low-quality, uncertified products penetrating Mexico’s PV market, both for distributed generation and Mexico’s WEM. By our estimates, 15-20 percent of Mexico’s PV installations in Mexico’s distributed generation sector is not backed by required certifications or warranties, negatively impacting the market. PV installation needs to make the regulatory shift from NMX, which are recommendations, to NOM, which are compulsory requirements. We are also in talks with CONUEE to include renewables within its energy efficiency scope and promoting an ombudsmen figure for final users.
Q: What are AMFEF’s immediate objectives?
A: Our priority is the creation of the PV installation NOM. It is a lengthy process that requires the participation and collaboration of various players, including manufacturers, importers, industrial companies, regulatory authorities and academia.