A plant manager reading a CFE invoice on a medium voltage tariff is not looking at one price. CRE published the methodology behind the bill in the DOF on 28 January 2022. A GDMTH invoice is assembled from an energy charge split into base, intermedio and punta periods, and a capacity charge set by demand coincident with peak hours. Distribution, transmission, CENACE operation and the supplier are charged separately again. A rooftop array reaches the daytime energy charges. It does not by itself move the capacity charge.
That is the whole of the economics. The share of the invoice a system removes depends on the energy to demand split in that specific bill, not on the size of the array on the roof. The decision in front of a facilities or finance director is whether to fund a system from the balance sheet, lease one, or contract the output from a developer. What follows sets out what the array reaches, what the 0.5 MW threshold does and does not exempt, and what the surplus is actually worth.
What the array reaches, and what it leaves alone
Self consumed generation removes the energy charge for those kilowatt hours and the per kilowatt hour components that ride on them. The capacity charge behaves differently. It is set by demand measured in the peak period, so it falls only where generation coincides with the punta hours defined for that region and season. Add twelve months of energy charges, add twelve months of capacity charges, and look at the ratio before anyone quotes a percentage.
The same arithmetic disposes of a saving quoted against consumption. Displacing 40% of the kilowatt hours does not produce a 40% lower invoice. It produces a 40% cut in one group of charges while the others stay where they are, unless the load shape moves with them. A proposal that quotes a saving without naming the tariff class and the demand component is quoting a number it cannot support.
What the 0.5 MW threshold exempts, and what it does not
Article 17 of the Ley de la Industria Eléctrica, published in the DOF on 11 August 2014, exempts generation below 0.5 MW from holding a CRE generation permit. That is the whole of the exemption. A rooftop system still needs an interconnection contract with CFE Distribución, municipal construction and land use approvals, and structural sign off on the roof that will carry the array. No permits required is not a description of any Mexican rooftop project.
The interconnection step has a published timetable. SENER published the Manual de Interconexión de Centrales de Generación con Capacidad menor a 0.5 MW in the DOF on 15 December 2016. It sets a maximum of 13 days to process a request that needs no interconnection study, and 18 days where a study is required, measured from registration of the request to the interconnection being made. Where the distributor requires specific works, the manual adds the time to pay the aportaciones and build them on top of those windows. Structural survey, municipal approvals, procurement and installation sit outside them and vary by site, which is why a single project duration quoted for every roof tells a planner nothing. Our note on distributed generation in Mexico covers the contract models behind the process.
Surplus is credited, not sold
CRE's distributed generation rules, issued as RES/142/2017 and published in the DOF on 7 March 2017, set out three schemes. Under medición neta the exported kilowatt hours become a credit against later consumption, and credit unused after twelve months is liquidated at the local marginal price of the node. Under facturación neta the injections are paid at that nodal price, which sits below the retail tariff. Under venta total the whole output is sold and nothing is self consumed. A rooftop project on medición neta produces no revenue line. It produces a smaller invoice.
That has a design consequence a payback model has to carry. A plant with low weekend and night load that oversizes its array banks credits it may not consume inside the twelve months, and the unused balance settles at a nodal price well below what the plant pays for its own supply. Size the array against the daytime load it can actually displace. On most industrial roofs the last kilowatt peak added is the least valuable one.
Solar without storage is not backup
The 2016 SENER manual requires anti islanding protection, so a grid tied inverter disconnects when the CFE network fails. A conventional rooftop array delivers nothing during an interruption. It reduces the energy a plant buys and leaves the plant's exposure to an outage where it was.
Where continuity is the objective, the specification changes. Storage and an inverter able to island are separate equipment with separate capital cost, and the sizing question becomes how many minutes or hours of which loads have to ride through. Those two projects get confused because they sit on the same roof. They carry different budgets and different justifications, and a board paper should not merge them.
Sizing the roof and the yield
The World Bank and ESMAP placed Mexico among the countries whose long term daily photovoltaic output exceeds 4.5 kWh per installed kWp, in Global Photovoltaic Power Potential by Country, published in 2020. At that level a kWp yields roughly 1,640 kWh a year. The World Bank figure is already net of the report's assumed 3.5% soiling loss and 7.5% of inverter, cabling, mismatch and inter-row shading losses, so it is a system output rather than a module output. Assume a module of about 500 Wp measuring roughly 2.1 by 1.05 meters, so about 2.2 square meters each. On that assumption a megawatt peak of modules covers about 4,400 square meters of module surface. Usable roof has to be larger again once walkways, skylights and setbacks come out. Treat the national figure as a screening tool and model the site with its own irradiance data before any payback is quoted.
Run the numbers as an illustration. A 20,000 square meter roof with half of it usable supports something near 2.3 MWp and roughly 3.7 GWh a year. That array is more than four times the 0.5 MW exemption, so it would not be a distributed generation project. It would need a CRE generation permit and a CENACE interconnection study, and medición neta would not apply to it. Sites that want to stay inside the distributed generation regime cap the array below 0.5 MW and accept a smaller share of load. On a large industrial roof that trade, not the panel price, is the decision.
How the system gets paid for
Three structures cover almost every Mexican rooftop project and they differ in who owns the asset. The company buys and owns the system. The company leases it. Or a developer owns it and sells the output under a power purchase agreement. Only ownership puts Article 34, fraction XIII of the Ley del Impuesto sobre la Renta on the buyer's side. It allows a 100% deduction in the year of investment for equipment used to generate energy from renewable sources, provided the equipment stays in operation for at least five years after that year.
Under the third structure there is no capital outlay and there is still a capital cost. Engineering, procurement and construction are recovered through the tariff across the contract term with the developer's cost of capital inside it. The comparison a finance director needs is the offered tariff against the CFE charges it displaces, and both against the levelized cost of owning the same system. Our earlier questions and answers on power purchase agreements set out the contract terms that decide it.
What to put in an EPC request
Contractor selection deserves criteria rather than adjectives. Five items are worth writing into the request. The scope of the structural survey and who stamps it, because the roof will carry dead load and wind uplift it was not designed for. Module and inverter warranty terms in writing, including who honors them if the supplier leaves the market. A performance guarantee stated in kWh a year against a named irradiance basis, with a remedy if it is missed. A clear answer on who files the interconnection request and who owns the schedule if the distributor requires works. Monitoring at the production meter and at the revenue meter, because a saving nobody measures is a saving nobody can prove.
See what your roof and your tariff can deliver
The saving depends on the tariff and the load shape, not on the size of the array. Send twelve months of CFE invoices, the tariff class and RPU, the roof area and construction type, and a daytime load profile if the meter produces one. Mexico Energy Partners will return the usable roof area in kWp, the share of the invoice a system of that size would reach once the capacity charge is separated out, and whether the project sits above or below the 0.5 MW threshold. A company that would rather start from a scope can request a quote instead. No saving, payback or eligibility is promised before the invoices are read.
Sources
- Ley de la Industria Eléctrica, Article 17, DOF, 11 August 2014, on the 0.5 MW generation permit exemption.
- Comisión Reguladora de Energía, Resolución RES/142/2017 on distributed generation, DOF, 7 March 2017, on medición neta, facturación neta and venta total.
- SENER, Manual de Interconexión de Centrales de Generación con Capacidad menor a 0.5 MW, DOF, 15 December 2016, on the interconnection windows and anti islanding protection.
- Comisión Reguladora de Energía, methodology for the final basic supply tariffs, DOF, 28 January 2022, on the charge components of a GDMTH invoice.
- Ley del Impuesto sobre la Renta, Article 34, fraction XIII, on the 100% deduction for renewable generation equipment and the five year operating condition.
- World Bank and ESMAP, Global Photovoltaic Power Potential by Country, 2020, on Mexico's photovoltaic output per installed kWp.