Isaac Triana

Analyzing the Mexican solar energy potential

Advantages and challenges for the solar industry in one of the world’s best market

The International Energy Agency stated in its ​2017’s Renewables Report that the solar
photovoltaic sector had been the source of energy which had grown faster in 2016—which is
a result obtained mostly due to the large-scale deployment of pv projects in the People’s
Republic of China. Out of the 74 GW of pv installed capacity reached worldwide, China
accounted for more than half of it, becoming the world’s largest deployer of pv modules. The
impacts that this massive unfolding has brought to the solar power market are varied and
their ramifications as vast as the fields over which solar panels are being installed around
the world. One particular and immediate effect of this huge deployment there, is the ​watt’s
cost reduction​, which in turn, propelled pv industry in countries like Mexico—where a
reduction in the pv projects’ costs ​saw a direct impact in the growth of installed capacity the
country had, not only in 2016, but also in 2017 and 2018.

Mexico, is a country blessed by the sun. Its geographical location—latitudes 14° and 33° N
and longitudes 86° and 1191° W—make it one of the few privileged countries to lie fully
within the world’s most favored solar belt. In average, it receives more than double the
amount of solar radiation recorded by Germany​—which is one of the planet’s pv industry
leaders. To be precise, while Mexico gets around 5kw/h per square meter every day,
Germany receives less than 2kw/h per square meter daily​.

The importance of this information lies in the fact that, for example, if Mexico were to fully
power the country using only pv modules, it would need approximately one thousand square
meters, whereas Germany or Canada would require two times this area in order to deliver
the same amount of energy. This means that Mexico can—with relative ease—transition
from a carbon-based economy to one in which sustainable growth becomes the country’s
new normal. Additionally, the legal framework surrounding the energy sector that Mexico put
in place at the beginning of President Peña Nieto’s administration has helped this young
industry to develop quickly, making it ​one of the most attractive countries for investors in the
sector of clean energy.

These previously mentioned facts demonstrate that Mexico—which has the largest pv
module manufacturing base of all Latin America—possesses great solar potential which can
be taken advantage of, thus laying out a bright future for the country; however, it is
necessary to acknowledge that the industry as a whole is young and the expertise and know
how still have room for expansion. Furthermore, there are several challenges ahead which
demand full attention from experts, policy-makers and other decision makers in order to find
ways to sort these out successfully.

One of these future challenges is the effect of the infamous ​duck curve​, which is already
becoming an issue in cities where electricity supply coming from pv modules ​reaches 15% of
the energy mix and floods the grid during the day, making the power plants—largely running
on natural gas—become unnecessary during sun hours. Nevertheless, once the sun goes
down and pv modules no longer generate electricity, these power plants must rapidly ramp
up production at a higher cost for them in order to quickly supply the grid and prepare it for
the increasing demand that peaks after the sun sets and wipes out solar output. As a result
of this, the cost of electricity ​sharply increases because these power plants need to be
running all the time in order for them to be economically viable​. Under this new model, the
current fleet of power infrastructure—which is not yet ready to receive large amounts
electricity coming from renewables—must stop production and let renewables take over
during the day in order to avoid overloading and damaging the grid. Alternating between
these two sources of energy doesn’t make economic sense in the long run.

Another future challenge that needs to be tackled is finding a solution to the fact that once
modules become old and no longer useful, they essentially become waste. The massive
deployment of solar in places like Mexico, China, Germany and other places can contribute
to the environment while the modules are operational because they do not pollute water or
the air when they are generating electricity; however, if little effort is put into solving the
waste issue, countries will most likely—and paradoxically—be facing an environmental crisis
caused by the very solution to the problem that needs to be solved.

The bright side of this is that the Mexican industry is relatively far away from the previously
mentioned scenarios of duck curve and the need to recycle a massive amount of pv module
materials. Regarding the first problem, it is likely that in the short term Mexico will not have
trouble dealing with adapting its system to the solar output because—​according to figures
provided in 2016​—its penetration in the energy mix is .53%. On the other hand, since the
industry is young, there is still time to work through different alternatives that provide
solutions to the breeding problem of solar waste. ​Studies have demonstrated that up to 97%
of the materials used during the thin film manufacturing can be recycled using thermal
technology; nonetheless, the pv module recycling procedure is more complicated because
the pieces need to be removed one by one and then crushed and reused. Even though this
process is less efficient, it still can reach 95%, so this is a good enough start.

Mexico is a country with great advantages, not only due to its privileged geographical
position and the amount of solar radiation it receives, but also as a result of its reforms in the
electricity sector and its well structured manufacturing base. As a country that came late into
the energy revolution, it learns from successful models implemented in different countries
and adapts them to the local conditions, which gives it the opportunity to accumulate
valuable knowledge that later on will be useful to push for indigenous innovation.
Nevertheless, enjoying favorable conditions and perceiving challenges to still be far ahead is
no reason to feel comfortable at all. Several policy measures have yet to be thought through,
tried out and fully implemented in order for the country to be ready to reap the most benefits
of this ever shining source of energy. There is still a long way ahead.