Mexico hardly registers as a must-tackle solar market, yet it may well be where concentrating photovoltaic (CPV) technology will bloom. SolFocus said Thursday it’s clinched a deal to supply its CPV equipment to a project that will be built in 50-megawatt phases and is planned to eventually reach 450 megawatts.
Construction of the first 50 MW is set to begin later this year and could start producing power by the end of 2013. Even at 50 MW, the scale will far exceed the roughly 8 MW that have been installed around the world using SolFocus’ technology, said Nancy Hartsoch, vice president of marketing and business development at SolFocus. Not counting the proposed 450 MW, $1.4 billion project, SolFocus has about 35 MW of projects under contract or construction, she added.
The kind of CPV technology that has been developed by California-based SolFocus concentrates sunlight hundreds of times onto tiny triple-junction solar cells that are expensive but also more efficient than the semiconductors used in conventional and much larger solar cells, such as silicon, cadmium-telluride and copper-indium-gallium-selenide. Interest in developing CPV technology grew around the middle of last decade, when silicon prices were sky high. The concentrating technology makes it possible to cut costs by using much smaller solar cells without reducing the amount of power produced. Other tech developers in this space include Amonix, Soitec, Morgan Solar and Semprius, which just announced a $7.5 million funding this week.
The 450 MW project is being developed by SolMex Energy, a joint venture between Mexican real estate developer Grupo Musa and U.S. energy developer Synergy Technologies and will be located on land owned by Grupo Musa in Baja, near the border town of Tecate. Most of the first 50 MW will go to Grupo Musa and some of its affiliates. The rest of the power will be sold through an auction.
The plan is to start building an additional 100 MW in 2014, 150 MW in 2015 and 150 MW in 2016, Hartsoch said. The project is accompanied by a plan to build a 100 MW factory to make CPV solar panels that will be used for the project, she added. Details of the factory plan are still being worked on, such as its location and source of financing, but it will involve a contract manufacturer. SolFocus already uses contract manufactures to make the panels and trackers for its CPV systems.
The project will dramatically increase the amount of solar energy production in Mexico. That figure currently stands at around 6 MW, which is coming from mostly rooftop systems, Hartsoch said. Mexico doesn’t have feed-in tariffs or renewable energy mandates that have made desirable markets out of countries such as Germany and the United States. But the country is served by only one utility, which charges a wide range of rates that fluctuate often, she noted. The government also subsidizes power for certain types of customers, such as companies in industrial and agricultural operations.
In fact, retail electric rates could vary from 5 cents per kilowatt-hour to 30 cents per kilowatt-hour, Hartsoch said. Electricity is set to become more expensive over time, too. As a result, even if solar electricity is more expensive, its pricing can be predicable and stable for decades.
“In northern Mexico you have a lot of factories that would pay more just to have the confidence in what the energy price is today and tomorrow,” Hartsoch said.
A 1 MW project using SolFocus’s CPV equipment is being built in the Mexican state of Guanajuato to power a factory, and the factory owner, Granite Chief, expects the energy savings from the project will pay for the project’s cost in eight years.
SolFocus and other CPV technology developers have pegged parts of Latin America as promising markets. The technology works best in places drenched in intense sunlight and have few cloudy days. That’s because the lenses used to concentrate the sunlight onto solar cells perform well when they can make use of direct light. The high desert in western Chile has drawn a strong interest from CPV technology companies, particularly when it also is home to many copper and other mining operations that need a lot of energy.
In the United States, CPV projects are showing up mostly in the southwestern states. Developers completed 10 projects totaling only 12 megawatts in the United States in 2011, according to GTM Research. That’s small compared to 1,855 megawatts of traditional solar panels installed last year. CPV installations should increase this year, mostly because of a 30-megawatt project being built in Colorado, GTM said.