US$500 Million to Be Invested in DG Before End of 2022

In recent years, distributed generation (DG) in Mexico has slowly but surely consolidated its place in the energy sector. Although a potential rise in interest rates and the imminent arrival of an economic recession could be otherwise threatening to the industry, experts said that the use of DG for homes and businesses will see a further US$500 million investment in Mexico before the end of 2022.

On 28 June, industry experts involved in photovoltaic (PV) solar projects met in Leon, Guanajuato, and discussed two upcoming events: the third edition of the Solar Power Mexico and the first one of Ecomondo Mexico. Among the experts were Thorsten Hofmann, Director of Solar Power and Ecomondo Mexico, María Isabel Ortiz Mantilla, Minister of the Environment of Guanajuato and Manuel Gómez Herrera, Director, the Mexican Association of the Photovoltaic Industry (AMIF).

“DG will keep on growing and if neither the pandemic nor recent policy changes kept DG from developing, then nothing could stop it,” Gómez recently told La Jornada. He commented that the current total investment in DG stands at US$3.5 billion, but estimates that, with the added investment, this sum would amount to a total of US$4 billion in eight years.

Ortiz said that the state government is aware of the importance that these activities have in promoting sustainability in Guanajuato, which is why they decided to “create a diversifying and energy-efficiency program, which consists of three main pillars: safety, energy sustainability and competitivity.”

The director of AMIF finally clarified that because of the current DG regulation threshold, systems can only be up to 0.5MW. For companies using more electricity, larger systems would be especially beneficial.

A recent study published by BBVA and GIZ evaluated the prospect of developing untapped DG potential in a growing market. In the past ten years, the installed capacity of DG and its number of interconnection contracts have increased sharply because of low regulatory barriers, the cost reduction of PV technology, rising electricity fees and fiscal benefits to legal entities and enterprises. The compounded annual capacity growth rate stemming from these factors stands at 91 percent.