Summary

The Mexican solar energy market is expected to register a CAGR of more than 8% during the forecast period of 2020-2025. Mexico has some of the most attractive solar irradiation profiles across the world. The country’s total territory lies between the latitudes 14°N and 33°N and the longitudes 86°W and 119°W, signifying that it is one of the few countries that lie within the most favorable sunbelt on the planet. Moreover, Mexico has emerged as one of the top markets for solar PV in recent years, owing to its aggressive deployment of solar PV plants that were awarded in the first three long-term auctions (LTAs) during 2015-2018. The country touched the GW mark in 2018 for the first time, with 2.7 GW newly installed capacity in the same year. In addition, the declining costs of solar technologies are becoming competitive with fossil fuel sources, and additional subsidies on solar systems are further driving the solar power market. On the other hand, in the absence of any new initiatives, limited land, and factors, such as cancellation of the fourth auction round by the new government, an underdeveloped power grid of Mexico is expected to hinder the growth of the solar PV market in the coming years.

Key Highlights
Utility-scale solar energy projects have been growing in Mexico, which may dominate the market during the forecast period, owing to higher investment and government policies. Many ambitious solar energy projects are lined up during the forecast period, which may drive the solar market at the estimated growth rate.
In Mexico, the solar financing wave is being fueled in large part by the country's renewable energy goals, which are 35% by 2024 and 50% by 2050. The higher investment and government policies are expected to provide good opportunity to the Mexican solar energy market during the forecast period.
Increasing solar energy installations, owing to the projects announced in the LTAs during 2015-2018, increasing demand for decentralized solar energy systems, and the ambitious renewable energy targets are expected to drive the solar energy market in Mexico during the forecast period.


Key Market Trends

Utility-scale Solar Energy Projects Driving the Renewable Market


Mexico is currently one of the global hotspots for renewable energy markets. The country lies within the most favorable sunbelt on the planet and enjoys around 2,190 hours of sunshine per year. The major hotspots for the solar energy market in the country include the state of Baja California, Coahuila, Chihuahua, and Sonora.
In recent years, solar energy has marked itself as the renewable energy with the largest presence in the country. The solar PV market reached the GW scale mark in 2018 for the first time, with 2.7 GW newly installed capacity. In June 2019, the cumulative installed PV capacity increased by 32% and reached 4.057 GW. Also, from December 2018 to May 2019, the number of large-scale solar parks reached 44 operating in 14 states, with an installed capacity of 3.36 GW.
Moreover, in 2018, the government passed three auctions allocated around 4.8 GW of solar generation capacity, with a cumulative investment of around USD 5 billion for about 40 solar power plants.
Hence, with several projects under operation and others in the planning and construction phase, Mexico is moving toward becoming a primary solar energy market.


Increasing Demand for Decentralized Solar Energy Systems is Expected to Drive the Market


Decentralized solar systems, also called as distributed solar energy systems, are small-scale, self-supply solar energy systems that are less than 0.5 MW in capacity and connected to a distribution circuit with a high concentration of load centers. These solar generators do not need a CRE permit for installation.
Initially, these small-scale solar systems were established in rural areas that are not connected to the national grid. However, gradually, residential and commercial buildings in the urban areas also began installing solar PV panels.
Though distributed solar generation is still in a nascent stage in Mexico, it witnessed a rapid growth in the last few years. One of the major factors driving the growth of the distributed solar generation is the reduction in the cost of solar PV systems. As of August 2019, average solar energy systems in Mexico cost USD 3.02 per watt, which is less than the average price of solar systems in the United States, which is around USD 3.34 per watt.
As of 2018, more than 100,000 roofs on commercial buildings, industrial buildings, and homes have distributed solar PV installations. This number is projected to increase to around 650,000, by 2023.
Hence, owing to the aforementioned factors, the decentralized solar energy systems in the country are likely to grow, which, in turn, is likely to act as a key driver to the market studied, during the forecast period.


Competitive Landscape

The Mexican solar energy market is fragmented. The major companies include Sojitz Corporation, Enel Green Power SpA, Trina Solar Ltd, Martifer Solar SA, and Jinko Solar Corporation.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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