With alternative energy projects stalled in Mexico due to controversial energy reforms, companies are increasingly turning to smaller-scale renewable options that allow businesses to cut carbon emissions while dodging fights with Mexican regulators.
Solar companies and energy analysts said they are seeing an unprecedented surge in distributed generation (DG) solar projects, which are smaller and less regulated with a threshold in Mexico of 500 kilowatts – enough to power about 200 households.
Bread-producer Grupo Bimbo and French energy firm Engie are among those increasingly turning to DG. Although these projects often provide just 10% or 20% of a company’s energy needs, they are seen as the “only game in town” right now, according to Andres Friedman, chief executive of Canadian-Mexican solar startup Solfium.
Even with the explosive growth predicted in DG, analysts doubt it will be enough for Mexico to successfully address its energy transition, given that government policies continue to prioritize fossil-fuel-generated electricity.
But for many companies, they are the best option, with DG projects not requiring a generation permit and taking just weeks to get approved, versus months or years for utility-scale projects. It is likely to stay that way too – at least for now – said analysts, who do not foresee changes to DG regulation in the near future.
“Companies have said, ‘that’s it, we’re going to be in control of our own destiny with distributed generation. We can do it immediately,'” said Friedman, who counts Engie, German industrial manufacturer Prettl and Legrand Group’s BTicino as clients.