Two fleets, counted separately

Mexico had 6,160 MW of utility-scale photovoltaic capacity in 2021 and, separately, 2,015 MW of distributed generation, almost all of it rooftop solar. Both figures come from NREL's April 2022 assessment, Mexico: North American Clean Energy Powerhouse. They are governed by different rules, they connect to different parts of the network, and they are available to an industrial buyer on completely different timescales. Any single "Mexican solar capacity" number that does not say which of the two it means is not usable in a business case.

A plant director choosing between an onsite array and an offsite contract is choosing between those two fleets. The onsite route is a distributed generation decision with a hard capacity ceiling. The offsite route is a transmission and contracting decision, and its cost is decided by charges that never appear in a headline energy price.

The plants that make up the utility-scale fleet

The large plants are worth knowing accurately, because their locations are routinely reported wrong. Acciona and Tuto Energy's Puerto Libertad plant is in Sonora, not San Luis Potosí, roughly 200 km northwest of Hermosillo. It is rated at 404.6 MWp of DC panel and 317.5 MW AC, and it entered operation in 2019. The MWp and MW AC figures are different quantities, and a proposal that quotes the DC number while modeling AC output will overstate delivered energy.

FRV's Potosí Solar, at 341 MW, is the plant in San Luis Potosí. It was awarded in the second long-term auction, SLP-1/2016. In Coahuila, Enel Green Power's 828 MW Villanueva plant at Viesca was inaugurated in March 2018 as the largest solar photovoltaic plant in the Americas. Mexico's first utility-scale solar plant was earlier and smaller: Aura Solar I at La Paz, Baja California Sur, 39 MW, inaugurated in March 2014.

Deployment is concentrated in the north. On NREL's 2021 state tables, Sonora led with 1,326 MW, followed by Aguascalientes at 907 MW and Chihuahua at 828 MW.

What CFE has announced at Puerto Peñasco

CFE has announced a 1,000 MW photovoltaic project at Puerto Peñasco, Sonora, to be built in phases. The cost and schedule figures circulating for it disagree with one another, and they do not all measure the same quantity. Some are a total project cost, some are peso construction appropriations covering a single phase, and some cover only the associated transmission build. No single number reconciles them, so a figure quoted without its basis is not usable in a business case.

Phase capacities, a battery rating, a transmission line length and a transformation capacity all circulate alongside the headline gigawatt, as do competing accounts of how the associated 400 kV build reaches Baja California. None of them is confirmed by a CFE document available to us, so they are left out here. Ask any supplier who quotes one of these figures which document it came from.

Potential figures, and the distance between them and a contract

NREL puts Mexico's national technical potential at 24,918 GW of solar photovoltaics and 3,669 GW of wind. Solar potential is therefore close to seven times wind potential, which is arithmetic from those two figures rather than a market forecast. Regionally, the southeast holds 5,561 GW of solar PV potential, and Baja California Sur holds 743 GW of solar PV plus 516 GW of concentrating solar power.

Set 24,918 GW of potential against 6.16 GW installed. Potential runs to roughly four thousand times the installed fleet, because technical potential measures suitable land multiplied by resource quality and says nothing about transmission capacity, interconnection queues, offtake or capital cost. A supplier that opens with a technical-potential number and does not follow it with a node, an interconnection study and a route to offtake has not made a commercial argument.

Who actually decides whether a project connects

CENACE is not an academic body and not a solar industry association. It is the independent system operator and market operator for the Sistema Eléctrico Nacional. It controls the grid, dispatches generation, operates the Mercado Eléctrico Mayorista, and runs the interconnection studies that determine whether a proposed plant can connect at a given node and on what terms. It also registers Centros de Carga and market participants. That is why CENACE matters to a utility-scale solar decision, and consultation with academic institutions is a separate question entirely.

CRE is the regulator. It issues generation and supply permits, approves regulated transmission and distribution tariffs, and issues the disposiciones governing distributed generation and Usuarios Calificados. SENER sets policy and issues the PRODESEN, which carries the transmission expansion and modernization program. CFE is a state productive enterprise and a market participant. It is not a regulator.

The routes actually available to an industrial buyer

The long-term auctions are frequently recommended as the mechanism to watch. They are not currently a mechanism. CENACE suspended the fourth long-term auction on 3 December 2018 and announced its cancellation on 1 February 2019, and none has been held since. The three that ran did set useful reference points: the third, SLP-1/2017, resolved on 22 November 2017 and awarded 2,562 MW across 14 projects, including 1,323 MW of solar photovoltaics, at an average of USD 20.57 per MWh bundled with one Certificado de Energía Limpia. Keep the plus-CEL qualifier attached to that number.

With the auction channel closed, three routes remain:

• Onsite generation below 0.5 MW. Interconnects under the SENER Manual de Interconexión (DOF, 15 December 2016) and CRE resolución RES/142/2017 (DOF, 7 March 2017), with no CRE generation permit. The 0.5 MW limit is on the plant's generating capacity, not on the site's load, and it is expressed in MW, not in kWp of DC panel. Under medición neta, surplus accrues as energy credits against future consumption for up to 12 months rather than being sold to CFE.
• Qualified supply. A load with 1 MW or more of demand can register as a Usuario Calificado with CRE and contract with a Suministrador de Servicios Calificados. Demand means maximum recorded demand in kW over the preceding 12 months, per the SENER acuerdo published in the DOF on 1 March 2017.
• An offsite solar PPA delivered across the network. Here porteo, the wheeling charge, decides the outcome. CRE revised the porteo estampilla for holders of legacy interconnection contracts in 2020, with the higher charge reported as applying from July 2020. La Jornada reported on 11 June 2020 that CFE Intermediación de Contratos Legados raised those porteo tariffs by 427 to 811% depending on voltage level. Model the delivered cost, never the generation price alone.

What cities are doing, and why it is a smaller number than it sounds

Mexico City's Ciudad Solar program, run by SEDEMA, covers solar water heating in homes, photovoltaic systems in the commercial, industrial and public sectors, an 18 MW solar array at the Central de Abasto, and training and certification for installers. Its stated targets include 300 solar systems on government buildings by 2024. For a commercial or industrial site in the Valley of Mexico, the relevant part is the installer certification and the precedent set by the Central de Abasto array, not the residential program.

Three developments that would move this

A new convocatoria for a long-term auction would restore a price benchmark the market has lacked since February 2019. A CRE decision on porteo treatment for new offsite contracts would move offsite solar economics more than any change in panel prices. And if the Puerto Peñasco transmission schedule slips, the phasing of the plant slips with it, and the northwest capacity picture moves to the right. None of the three is committed today.

Test onsite against offsite for your site before you commit capital

Mexico Energy Partners can compare an onsite array below the 0.5 MW threshold against an offsite solar PPA priced with porteo included, using your site's actual tariff class and load shape rather than a national average. The comparison needs 12 months of CFE billing, interval data where a meter records it, the single-line diagram and available roof or land area.

Request a solar procurement comparison for your site

Related: strong fundamentals for solar power in Sonora, our overview of renewable energy in Mexico, and our utility-scale solar capabilities.