Unleashing Solar Potential to Guarantee Sustainable Energy Supply

Solar energy emerges as a promising solution within Mexico's energy sector, providing a viable pathway toward sustainability. Through an examination of Mexico's present standing in solar energy, coupled with technological advancements and the potential for distributed generation and energy storage, stakeholders are set to unlock the full potential of solar energy, thereby guaranteeing a sustainable and dependable energy supply for the future. Prevailing challenges, such as infrastructure constraints, however, have limited the utilization of these energy generation systems.

Mexico continues to grapple with critical infrastructure constraints, particularly concerning the expansion and modernization of its electrical grid to guarantee a reliable electricity supply. This issue becomes especially imperative in regions characterized by robust industrial development, where there is a notable uptick in energy demand. Furthermore, in underdeveloped areas, improving this infrastructure has the potential to act as a catalyst for heightened industrial investment.

Currently, Mexico possesses abundant solar resources, making it an ideal candidate for solar generation. Embracing solar energy not only contributes to sustainability but also reduces dependence on fossil fuels and mitigates environmental impacts associated with traditional energy sources. Empowering the end-user to make decisions regarding their energy consumption marks a significant shift, driven by technological advancements. “In a country where 90% of households are domestic, reducing dependency on the grid is inevitable,” said Jorge Musalem, Strategic Projects Manager, CFE.

The increased utilization of solar is key for Mexico to advance in its energy transition, but also to ensure the continued harnessing of the benefits that nearshoring has brought to the national economy. “Mexico is in a particular condition not only due to nearshoring but also because its generation matrix relies on fossil fuels,” said Nelson Delgado, General Manager, ASOLMEX. “If we are not capable of generating solar energy, nearshoring will slip away from us,” added Zúñiga.

To enhance the adoption of solar energy and improve Mexico's energy supply, stakeholders must prioritize the implementation of solar projects and invest in infrastructure to support distributed generation.” If we generate and store energy at the point of consumption, rather than transporting it, costs are reduced. It is only a matter of time before users start to opt out of the grid,” said Musalem. 

“We want to power industrial parks, yet we see almost 100% of the rooftops empty. There is very limited photovoltaic solar generation,” said Ricardo Zúñiga, Country Manager, CapWatt.

Another challenge facing the solar industry in Mexico is the lack of transmission infrastructure to accommodate the growing demand for renewable energy. To address this issue, DG has appeared as a crucial alternative. These systems have experienced significant growth, notably led by Jalisco, marking its most successful year to date. Despite limitations such as a maximum capacity of 0.5MW per installation, which falls short compared to Brazil's 5MW capacity, the sector has seen a remarkable surge of 49% since 2019. This highlights a notable shift toward renewable energy participation, despite initial governmental reservations. By the end of 2023, DG had attracted investments totaling US$4.5 billion, with an installed capacity of 3,300MW, according to CRE.

From a technological standpoint, significant advancements have been made in the implementation of photovoltaic projects in Mexico. Innovations in solar panel efficiency, energy storage systems, and grid integration technologies are revolutionizing the solar industry, rendering solar energy more accessible and cost-effective.

“Efficiency rates of modules have surpassed 20%, compared to previous standards, utilizing less space and incorporating bifacial technology. These advancements have led to increased efficiency, reduced degradation, and maintained high performance over time,” said Iván Reyes, Utilities Director, LONGi Solar. By leveraging these advancements, stakeholders can overcome technical barriers and accelerate the deployment of solar projects, driving the sustainable energy transition across the country. Moreover, the solar industry must educate stakeholders on the economic benefits of various technologies, extending beyond installations up to 500kW, according to Musalem. Furthermore, incentivizing industrial adoption through diverse business models is crucial for widespread acceptance, explained Zúñiga.

The economic viability of solar energy presents an attractive proposition for industry development. According to a report by the Mercom Capital Group on corporate financing within the solar sector in 2023, there was a notable 42% year-on-year increase in global financing. This report meticulously tracks venture capital, public market, and debt financing activities, revealing a substantial total of US$34.3 billion raised across 160 deals in 2023. This represents a significant surge compared to the US$24.1 billion raised through 175 transactions in 2022, marking the highest level of corporate financing within the solar sector in the past decade.

Solar photovoltaic generation holds immense potential to guarantee a sustainable energy supply in Mexico. By embracing solar energy solutions, leveraging technological advancements, promoting distributed generation, and addressing infrastructure constraints, stakeholders can unlock the full benefits of solar energy and pave the way for a cleaner, more resilient energy future, agree experts. 

“All that is new requires adaptation, especially when it comes to such an essential service as electricity. Now, meeting the transition is imperative, with numerous challenges and hurdles ahead,” said Alessandra Amaral, Executive Director, ADELAT.