Dive Brief:
- The Mexican unit of SolarCity expects to invest $1 billion over the next five years, the president of the company's operations there told Reuters in a recent interview.
- SolarCity Mexico President David Arelle said its plans will depend on whether the government puts new limits on net metering, but the company expects to add 2,000 new employees if the situation remains stable.
- Mexico, the United States and Canada have jointly committed to increase their carbon-free resources and last week Mexico indicated it would ratify the United Nations Paris climate accord.
Dive Insight:
Despite SolarCity's less-than-stellar quarterly report following Tesla Motor's bid to merge the two companies, it appears the company is gambling big on its Mexico operations.
SolarCity made its first foreign acquisition last year, spending $15 million to snap up ILIOSSON, S.A. de C.V., one of the larger solar developers in Mexico. But the company's plans to expand ILIOSS far exceed the purchase price, according to Reuters.
"We estimate that if things work out the way they should, over the next five years our investment could reach about $1 billion," Arelle told the news outlet. He added that across the rooftop solar sector, SolarCity expects investment in Mexico could reach $3 billion by 2021.
According to SolarCity's web site, the company is looking south of the border "thanks to the combination of low module, labor and permitting costs in Mexico."
But as in the United States, those figures are conditioned on net metering limits. Currently Mexico allows net metering for projects as large as 500 kW, but there is some fear the government could lower that to 50 kW, potentially halting the market's expansion.
New regulations for net metering could be finalized this year by Mexico's energy regulator, the Comisión Reguladora De Energía.
By 2020, SolarCity projects Mexico's installed solar PV capacity could reach almost 7,700 MW (DC), with annual installations of 2,000 MW. Currently there are about 900 MW of installed solar PV capacity, the firm believes.
Like all nations, Mexico is beginning to focus more on clean energy and has recently agreed to work with Canada and the United States on carbon-free sources. In June, the United States, Mexico and Canada reached a regional deal to produce 50% of their combined electricity by 2025 from clean energy sources, including wind, solar, nuclear and hydropower.The country also indicated it would ratify the Paris treaty.
