Mexico more attractive due to falling prices of PV modules
MEXICO CITY - Mexico, with its huge flat desert surfaces scorched by an omnipresent sun, is only just beginning to scratch the surface of solar. According to research, Mexican suppliers often indicate that funding is hard to get by, as financial institutions have difficulties assessing the advantage of PV technology and possess little experience in risk evaluation. The solar market, however, will quickly gain ground as solar becomes more and more competitive in comparison to other energy sources. The continuously dropping cost of solar modules is a decisive factor in the process.
Last year alone, prices of solar modules have dropped an impressive 30% in comparison to 2011, which is good news for consumers, who will be more easily persuaded to change to solar. In Mexico, high-consumption domestic consumers pay a special high marginal rate (dubbed DAC), that rose a sharp 25% since 2003. Analysts expect the DAC-consumers to be the most attractive segment in the Mexican market in the near future.
Conversely, falling prices seem bad news for firms such Jinko Solar, one of the leading producers of modules in the world. Its Chief Marketing Officer Arturo Herrero, however, is far from pessimistic. ,,I´ve been in the PV solar business for twelve years, and during that time I´ve seen cycles in which demand was superior to production. In the last two years, however, there has been much more investment in the sector and demand dropped has dropped, causing a sort of price war¨, he explains. ,,But we have reached the end of that cycle and I anticipate a strong demand in 2013, through which we must expand to over 1.5GW.¨
Jinko Solar will be one of the companies presenting at Solarplaza´s El Futuro Solar: México conference, held this month in Mexico City. Another speaker, Mexican firm SolarTec´s general manager Miguel Medina, shares Herrero´s optimism. ,,The drop of module prices hasn´t been as strong in Mexico as in other parts of the world. Moreover, to consumers it is actually an advantage.¨
Both men also indicate a healthy economic climate as an important reason why PV producers will find Mexico an attractive market to invest in. Medina cites the near complete lack of subsidies in the solar market: ,,It´s one of the reasons why the Mexican solar industry hasn´t grown as much as in other countries, but on the other hand, it´s normal growth, without distortion.¨ Herrero adds that ,,demand is rapidly growing and the conditions for investment are very favorable¨
They emphasize the importance of El Futuro Solar`: México . ,,I think it´s a very important event to disseminate information about our brand and explain about our products and services¨, Herrero says. Miguel Medina believes the conference will be very useful to create more knowledge. ,,One of the main problems in Mexico is that we don´t know how much the industry will grow. It is therefore very important for people in the business to come together, in order to get to know everyone´s point of view.¨
El Futuro Solar: Mexico will be held in Mexico City on February 28. Other speakers will be Robert Pfatischer (CEO of Meteocontrol) and Álvaro Lentz-Herrera (president of ANES, the Mexican national solar energy association )