With triple-digit growth rates, Latin America is one of the fastest growing regions for solar energy in the world today. According to GTM Research’s Latin America PV Playbook, the region is on track to install 2.3 gigawatts of solar this year.
Of that demand, Mexico is forecasted to install 149 megawatts this year -- just a sliver of the region’s total. However, GTM Research expects it to develop into one of Latin America’s most promising solar markets in the next few years. GTM has kept an eye on that opportunity and will be hosting its first international conference there in January 2016, Solar Summit Mexico.
Here are four reasons to be excited about solar in Mexico.
Mexico’s market is growing rapidly
By the end of December, GTM Research expects Mexico to be a cumulative 286-megawatt market. With over half of that having been installed this year alone, the country has clocked an impressive growth rate of 185 percent over 2014. Drivers include government promotion, rising demand, increasing electricity prices, and the strengthening cost-competitiveness of solar -- helping maintain a 71 percent growth rate until the end of the decade.
Mexico will reach close to 1 gigawatt in just two years
While the Mexican market has grown at an incredible pace, the real opportunity lies ahead. GTM Research forecasts Mexico to install 1 gigawatt in 2017 and as much as 2.6 gigawatts in 2020.
Those numbers could be much larger. "We see tremendous upside in the distributed generation segment, as it could get a boost from improved financing and increasing demand charges at the end-customer level," said Mohit Anand, senior solar analyst at GTM Research.
FIGURE: Mexico Solar PV Installations, 2007-2020E
Source: GTM Research Latin America PV Playbook
Utility-scale solar is a huge opportunity in Mexico
Only a handful of plants have been installed to date, but that’s likely to change. GTM Research is tracking a 9.4-gigawatt pipeline, though the actual number of projects that are completed will likely be lower. According to the Playbook, the utility-scale segment will experience a 78 percent compound annual growth rate through 2020, with strong upside tied to an increase in auctioned tenders for solar projects and increased bilateral contracts for solar.
Mexico could become a future destination for manufacturing PV modules
GTM Research ranked 50 countries across 25 distinct criteria to determine which markets are most attractive to manufacture PV modules. Mexico landed right in the middle at 26th place.
However, it ranked in the top 10 in the “access to demand” category, which was weighted as the single most important attribute for manufacturing solar modules.
Source: GTM Research PVMAX
Join GTM's first international conference, Solar Summit Mexico.