For the past decade, solar companies and investors have largely focused their energy on transforming the electric power business of developed countries, first in Europe and then the United States. As growth in some of these markets slows, an increasing number of companies are exploring new territories elsewhere. Could Mexico — and the rest Latin America – hold some promise?
The Mexican government is apparently looking to quantify how much solar energy the country could produce and, presumably, whether it should pass policies to encourage solar energy production. The National Autonomous University of Mexico on Monday said it’s getting government funding to measure the solar radiation levels in different parts of the country, reported Fox News.
Such data collection effort is a common practice by companies, research institutions and governments in large solar markets in order to estimate the energy production of solar power projects and the amount of investments and returns the projects will need and produce. The work involves measuring solar irradiance, which varies depending in part on the topography and weather pattern of a given region. Developers want to build projects in places with high solar irradiance.
Some parts of the world, such as the American Southwest, have higher readings of solar irradiance and therefore more sunny, cloudless days. And partly for that reason, giant solar farm development in the United States has been clustered in states such as California, Arizona and Nevada.
Mexico hasn’t gotten much attention from solar companies, many of which see China and India as the next big frontiers. First Solar, which is in the midst of shifting its strategy to survive a market downturn that is marked by bankruptcies and trade complaints, also is working on opportunities in Middle East, Africa and Australia. In all these emerging markets, government incentives play a big role in attracting solar manufacturers and project developers.
With the right government policy in place, however, Mexico could see more solar in its energy mix. Mexico’s energy department has taken a look at the country’s solar energy development potential before, and a few U.S. solar companies, such as Skyline Solar, have reported selling their solar energy equipment to projects in Mexico. The World Bank has approved a $49.3 million loan to finance a project that combines natural gas power plant with a field of solar energy equipment, which will turn the sun’s heat into steam to run the turbine-generator.
Elsewhere in Latin America, reports of solar power development have emerged once in a while. Chile is seeing some big solar project proposals in its northern mining region, where lots of sun and demand from energy-hungry copper mining operations have prompted mining companies to consider solar.
Peru also is attracting foreign investments in solar: T-Solar of Spain recently secured $145 million in loans to develop two solar projects totaling 44 megawatts. The overall cost of the projects is around $165 million, and some of the funding includes the up to $131 million in loans from the Overseas Private Investment Corp., which is part of the U.S. government. The OPIC is funding the projects because T-Solar makes solar panels with equipment from Silicon Valley firm Applied Materials.
Solarpack, also based in Spain, is developing a 16-megawatt solar project in Peru, in addition to two other projects it’s been building in the country.
Brazil, which will host the next World Cup in 2014, is adding solar to the soccer stadium where the games will be played. Like other Latin American countries, it has a smattering of solar projects under development but will need strong government incentives to see more installations.
The U.S. government has intensified efforts to help domestic companies to snag solar-related contracts abroad, including Latin America. Aside from the OPIC, the U.S. Trade and Development Agency approved in August a $267,000 grant to El Salvador’s national utility to study the feasibility of building a 3-megawatt project. The study would be done by a U.S. company.
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