The Benefits of On-Site Solar in Mexico

March 10, 2022

On-site generation, also known as distributed generation, is a viable option in Mexico because of the challenging regulatory climate related to the energy reforms. Distributed generation in Mexico is classified as any system with a capacity below 500 kWp. The big advantage is that permits are not required for on-site solar systems below 500 kWp. This reduces project execution risk while delivering savings of up to 25% for the consumer.

Industrial Clients Can Save Up to 25% and Reduce the Risk of Disruptions

The declining costs of solar technology has enabled large savings for customers. Mexico is particularly well suited for on-site solar due to the high level of irradiance which means the solar panels can generate substantial amounts of energy. However, working with an experienced EPC contractor that is less likely to experience logistical issues and delays is also vital to achieving the expected savings. 

Our on-site solar solutions enable companies to lower operating expenses with no upfront costs since the engineering, installation, and construction expenses are bundled into the energy tariff in the power purchase agreement (PPA). Selling surplus energy back to the grid (net metering) can improve the profitability of on-site generation. Net metering occurs when the on-site solar system produces surplus energy that is not needed at the facility.

On-site solar solutions also help to mitigate the risk of disruptions to business operations because of grid transmission problems. Various factors including weather, natural disasters, and excessive demand can impact electricity supply to a facility. On-site solar generation gives industrial consumers more reliability and self-sufficiency by reducing the reliance on the national power grid.

On-Site Solar Reduces Carbon Emissions and Improves Customer Retention

The global push towards better corporate social responsibility, and sustainability, are driving demand for on-site solar generation. On-site solar helps companies to display a commitment to sustainability which increases customer perception and asset values. 

Many of our industrial clients have stated that their end customers are demanding more sustainability. One client even mentioned that during the contract renewal process with their client, that "having solar panels on the roof" was a prerequisite for contract renewal. We expect this trend to continue as investors demand better ESG practices from corporations.

How to Get Started with On-Site Solar in Mexico

We need the location of the facilities and one year of utility bills to analyze the viable on-site solar options for a client. The process includes an evaluation of the location, roof materials, and available space for solar panels at the facility. A preliminary savings analysis and proposal are delivered to the client roughly three weeks after our initial conference call.

The duration from the signing of the power purchase agreement (PPA) to the start of supply can take from six months to eight months for a small on-site solar project. PPAs for on-site solar generation range from 10 years to 20 years. One must balance the need to "lock-in" larger savings with a longer PPA, versus the risk of market conditions changing substantially over that timeframe.

Contact us to learn more about our on-site solar solutions in Mexico. We provide industrial and multinational companies with seamless project execution and the largest energy savings in Mexico. Click here to learn more.

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