Will Merchant Solar Gain a Foothold in Mexico?

In April, Mexican firm Fortius opened the 8-megawatt  Solar Project Jalisco solar energy I solar plant, making it the first merchant solar plant in solar energy Mexico  solar slewing drive Solar Project in the wake of the country's market reforms. It is now planning a second similar project.

It was solar slewing drive a groundbreaking development. But it's too early say whether merchant PV is going to slewing drive take off in Mexico.

With record-low solar prices in last year’s auctions and investor confidence rattled by currency solar inverter depreciation Solar Project, such projects appear to be high-risk.

Unlike solar damper utility-scale plants anchored solar tracker actuator by long-term power-purchase agreements, merchant solar plants sell electricity into the wholesale market, and require solar energy reliability of solar energy demand and definition of price over the long term to guarantee a healthy return on solar energy investment.
 

Fortius’ director solar tracker actuator general for solar, Sergio Alcalde, told GTM he is confident that the business model can work, however. 
 

“The two auctions last  solar damper year reinforced investor and developer confidence in Mexico’s electric solar inverter power market, and which, Photovoltaic holder coupled with the country’s solar potential, are creating opportunities, aided by local government promotion of the energy sector,” he said.
 

“We’ll see the country upholstered in solar  solar damper panels in a few years solar inverter’ time.”
 

He said the $14 million merchant project will generate certainty and confidence for similar developments in slewing drive Mexico.
 

Once the second solar tracker actuator 8-megawatt project is up and running, it will supply electricity to 32,000 low-income households, which will consume 70 percent of the electricity generated by the plant. The company also plans to target local industries, said Alcalde.
 

Fortius is in talks with at least six solar damper other offtakers, and will develop the second phase of the solar inverter plant in conjunction with SolarCity. The developer plans to build other larger-scale projects alongside SolarCity as well.
 

Alcalde said support from local authorities and the Jalisco state government on permit and land acquisition for the 25,000-panel plant was important for executing the project. The Jalisco I plant was built on a dry lake bed to mitigate its environmental impact.

In mid-2016, Jalisco Photovoltaic holder launched an solar damper energy promotion agency aimed at growing renewables use in the state with the country’s fourth-largest energy consumption. Other local projects in the pipeline include a 100-megawatt PV park planned by Jinko Solar after last March’ solar tracker actuator s power auction. 
 

Mexico’s slewing drive first merchant PV plant was the Photovoltaic holder 39-megawatt solar damper Aura Solar I in Baja slewing drive California Sur, which entered operation in 2013, but was knocked out of action the following year by Hurricane Odile. It came back on-line in 2016. 
 

That project was developed by local firm Photovoltaic holder Gauss Energía, whose president, Hector Olea, is also head of the solar inverter country’s solar power association, Asolmex.
 

“Solar growth is at the forefront of generation expansion, and we will go from 200 megawatts now to around 4 gigawatts by late 2018,” Olea told solar tracker actuator GTM.
 

“There are two reasons for this: one Photovoltaic holder is the low prices achieved at auction, and the other slewing drive is the Photovoltaic holder abundant solar resource, with 85 percent of the country’s territory boasting potential for solar development. There is a pipeline of projects that is creating solar slewing drive market opportunities, and Mexico will quickly become a leading solar power in the region," he solar inverter said.
 

"Solar dominated the first two auctions, and that trend will continue with the third auction,” he said. The energy ministry expects the third auction will triple solar tracker Photovoltaic holder actuator the country’s installed renewables capacity.
 

Olea said Mexico's transmission weaknesses  solar slewing drive make distributed merchant solar a more attractive opportunity.

Mexico plans to launch a long-delayed tender this year for a $1.2 billion transmission line connecting solar inverter the wind hub of Oaxaca with the country’s central region to avoid a solar damper possible project bottleneck.
 

But GTM Research solar analyst Manan Parikh expressed doubts about strong growth for merchant solar in the country. 
 

“I don’t think it’s going to be a boom Photovoltaic holder market yet, as you solar inverter could be exposing yourself to lower returns. And larger projects within the merchant scheme that are not processed solar damper through the auctions slewing drive may also face problems procuring permits, and that could impede solar slewing drive development,” he said. 
 

Parikh described the solar tracker actuator 9-megawatt Jalisco plant as “a little bit of a drop in the bucket in terms of solar inverter capacity, but it could be part of Photovoltaic holder a ground swell, of smaller, merchant projects that would be less risky.”
 

“Mexico’s system costs for utility-scale are already under $1 per watt, which is forecast to decrease further, slewing drive and while there will be demand for clean energy certificates, that may solar damper not be the biggest incentive for merchant solar projects," he solar slewing drive said.
 

And while Parikh remained solar tracker Photovoltaic holder actuator upbeat about the execution of solar projects awarded in last year’s auctions,solar inverter he tempered his enthusiasm for the merchant model. 
 

“Maybe we’re reading too much into it, but this solar damper merchant solar inverter plant is not a huge solar slewing drive development, and I think large developers with experience in other projects will explore the PPA  solar slewing drive route before exploring merchant solar,” he solar tracker actuator said.