The recent energy reforms in Mexico have radically transformed the electricity sector and incentivized private sector participation in the renewable energy space. As a result, Current, a subsidiary of General Electric, plans to enter the solar PV market in Mexico. Specifically, Current aims to target the Commercial & Industrial (C&I) customer segment for behind-the-meter solar installations. For this purpose, Current asked the Capstone team to provide greater visibility into the solar development landscape in the country, including an evaluation of opportunities available for targeting C&I customers, a market-entry analysis, and recommendations on whether it is a favorable time for the company to enter Mexico’s solar photovoltaic market.
The Capstone team presented a comprehensive overview of the macroeconomic conditions in Mexico, the regulatory reforms and key financial incentives introduced, key players and competitors, past solar deals, and financing mechanisms prevalent in the market. Financial and sensitivity analyses were conducted to provide additional insight into the economics of installing solar, both in terms of customer savings and developer returns, given the prevalent tariffs and their expected escalation. The team also identified key economic, regulatory, political, and market risks, and upcoming market developments that need to be closely monitored in the next 6–12 months.