Mexico’s Solar-Power Capacity May Treble This Year

Mexico’s photovoltaic capacity could treble this year driven by the richest households and the first large-scale plants, according to the head of its solar lobbying group.

Solar installations will at least double to 60 megawatts from 30 megawatts operating now and may treble if state-owned utility Comision Federal de Electricidad calls a tender for more capacity this year, Alvaro Lenz-Herrera, president of the Asociacion Nacional de Energia Solar, said in an interview. CFE has been planning a bidding process for 30 megawatts in large- scale solar parks in Baja California since 2012, he said.

Mexico wants to increase solar-power generation to help reach its 2026 renewable-energy target of 35 percent of power generation from clean sources. The country offers tax incentives for solar projects and a so-called net metering system, as well as the possibility of long-term power purchase deals with CFE.

Capacity will be boosted by falling panel prices and low system costs, which are about 20 percent cheaper than projects in the U.S, according to the ANES president. Growth will accelerate in 2014 and 2015, he said.

Most installations so far are off-grid or residential, built through rural electrification programs and households that don’t qualify for subsidized power rates, respectively. Only three utility-scale solar parks currently operate with about one megawatt each, Bloomberg New Energy Finance data show.

The 500,000 residential users that pay the highest rate for electricity are a key market for solar energy, Lenz-Herrera said.