Mexico Renewable Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Mexico Renewable Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The market for renewable energy in Mexico is expected to register a CAGR of more than 10% 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. It also provides sufficient regular wind current in the offshore region. 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. In addition, the declining costs of solar technologies and wind energy are becoming competitive with fossil fuel sources, and additional subsidies on solar systems and wind equipment providers are further driving the renewable energy 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 renewable energy market in the coming years.

Key Highlights

• The photovoltaic solar projects have been growing in entire Mexico, owing to higher investment and government policies. Many ambitious photovoltaic projects are lined up during the forecast period, which may drive the solar market with the estimated growth rate.
• In Mexico, the solar financing wave is being fueled in large part by Mexico’s renewable energy goals, which are 35% by 2024 and 50% by 2050. The higher investments and government policies are expected to provide a good opportunity to the country's solar energy market during the forecast period.
• Upcoming renewable energy projects, owing to the increasing foreign investment and government policies, and the ambitious renewable energy targets are expected to drive the renewable energy market in Mexico during the forecast period.

Key Market TrendsPhotovoltaic 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 PV market in the country include the state of Baja California, Coahuila, Chihuahua, and Sonora.
• In recent years, solar energy marked itself as 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, several solar PV projects under operation and others in the planning and construction phase are expected to drive the Mexican renewable energy market.

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

• As of 2018, the total renewable energy installed capacity reached 22.13 GW, representing an increase of 14% over the previous year. Renewables (excluding hydropower) accounted for almost 6.4% of the total electricity generated in the country in 2018. Adding to this, factors, like declining costs of solar PV systems and wind energy, are driving the growth of the renewable energy market in the country.
• The 2013 Energy Reform created opportunities by positioning Mexico as one of the most attractive countries for foreign investment. In addition, energy reform opened the production and distribution of oil, gas, petrochemicals, and electricity to private investors, but also increased the share of renewables in the energy sector.
• Moreover, the government's purpose of long-term auctions (LTA) is to subscribe to electricity coverage contracts for trading of capacity, power (both during a 15-year period), and CEC (with a 20-year validity). Although the fourth long-term auction (LTA) for clean energy has been put on hold, the projects awarded in the previous auctions are expected to drive the renewable energy market in the country over the forecast period.
• In April 2019, a French multinational utility company, Engie, partnered with Tokyo Gas to accelerate the adoption of renewable energy in Mexico. The two companies are investing in Heolios, a 50-50 joint-venture company, to develop renewable energy projects in Mexico.
• Hence, the upcoming renewable project, owing to investment and government policies, is expected to drive the Mexican renewable energy market during the forecast period.

Competitive Landscape

The Mexican renewable energy market is fragmented. Some of the major companies include Siemens Gamesa Renewable Energy SA, Acciona SA. Enel S.p.A, Electricite de France SA, and Canadian Solar Inc.

Additional Benefits:

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

Companies Mentioned

Canadian Solar Inc.
JinkoSolar Holding Co., Ltd
SunPower Corporation
Trina Solar Co Ltd
JA SOLAR Technology Co.,Ltd.
Acciona SA
Siemens Gamesa Renewable Energy, S.A.
Enel S.p.A.
Vestas Wind Systems A/S
Electricite de France (EDF) SA

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