News, Insights and Best Practices for Manufacturing in Mexico

Mexican manufacturers should prepare for solar power growth

16 Jun 2016

Category: Manufacturing in Mexico, Politics & Regulations

Solar power has been discussed as an alternative to traditional fuel sources for over four decades. Unfortunately, it's failed to show success equal to the enthusiasm. The factors holding back the industry include lack of technology, commitment and government support, according to Green Tech Media.

These obstacles may fall away as conscious consumers and concerns over climate change force businesses and regulators to explore new energy production solutions. Mexico is one of the countries expected to benefit from solar power implementation and the need to manufacture new energy equipment.

The growth of solar power
While the solar industry has faced challenges in the past, governments and companies around the world are setting some lofty goals for the energy source. China Central Television reported the U.S. performed its millionth solar panel installation in May 2016. It's projected the U.S. will double the number of panels in the country by 2018.

Stories like this crop up globally as governments seek new energy solutions to meet standards established by international regulations such as the Paris climate agreement. China and America are two countries investing heavily in solar panels, with solar industry groups saying the sun will power 20 million American homes by 2020.

There is an expected 71% compound growth expected for the Mexican solar industry between 2016 and 2020.Solar may be the next major energy trend for Mexico.

Certain counties have access to more direct sunlight than others. Mexico, Chile and the Philippines are expected to see massive solar growth in the next few years due to natural advantages and other factors.

Mexico as a solar power leader
Mexico should become Central America's primary user of solar power. Clean Technica said the Mexican solar industry is expected to see a compound annual growth rate of 71 percent between 2016 and 2020.

Most of the Central American solar industry might see a bit of a slowdown in 2016. Mexico is the outsider for a variety of reasons. First of all, the country expected to see massive growth much earlier but success was slowed by regulatory confusion.

Green Tech Media suggested the state energy regulatory commission and other utility organizations have been unclear on their terms when it came to sustainable energy in the past - particularly when it comes to who is or is not a qualified user. The title will make businesses and individuals eligible for tax breaks and other incentives like clean energy certificates. Now that Mexico has more information about these rules, there should be more local interest in making use of government investments in solar energy.

"As solar panels improve, they become more cost-efficient."

The technology involved with solar power is also prohibitive for certain businesses. As solar panels improve, they become more cost-efficient and perform better. Computerworld shared findings by the international certification body DNV GL that listed China and Mexico as the countries manufacturing the highest-quality solar cells. The energy technology produced by these countries lasted longer and performed more efficiently than those assembled in other territories.

Manufacturing solar panels in Mexico
Mexico's interest in innovative energy falls in line with the countries renewed commitment to industrial technology. A recent manufacturing boom in the territory created a skilled workforce and flexible production facilities ready to respond to changes in demand. Mexican companies may benefit from the solar boom to create products for local consumers and foreign partners wishing to outsource solar panel manufacturing.

PV magazine detailed how Chinese solar panel manufacturers offshore their facilities to Mexico. This allows the companies to build products closer to American markets and avoid costly tariffs through Mexico's favorable trade agreements.

Offshoring advantages offered by Mexico don't just save companies money and resources, facilities in the country also offer high-quality production facilities. Sunpower, a solar energy company, shared the example of a Mexican plant that produced superior panels while running a facility that was completely eco-friendly. This commitment to quality and brand values can often be found in Mexican manufacturing facilities. 

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