Photovoltaic in Mexico Recent Developments and Future

Photovoltaic in Mexico Recent Developments and Future Rodolfo Martínez Strevel Berlin, Germany May 23th, 2013 Bufete de Tecnología Solar, S.A. (BUTECSA)

Production of Primary Energy in Mexico, 2011 % 7,0 3,2 1,2 1,1 23,0 64.6 % Oil Natural Gas Renewables Carbon Nuclear Condensates

Renewables in Primary Energy Production in Mexico, 2011 Renewable Energy % Hydro 1.42 Geothermal 1.62 Solar 0.06 Wind 0.06 Biogas 0.02 Biomass 3.80 Total: 6.98

Effective Generation Capacity of Electricity in Mexico Feb 2013 2.600 1.610 823 598 1 Total: 52,818 MW Thermal 11.555 35,631 MW Hydro Carbon Nuclear Geothermal Wind PV

Gross Electricity Production in Mexico, 2012 Gigawatts-hr 31.317 1.744 8.770 5.817 2 17.724 195,124 GWh Thermal Hydro Carbon Nuclear Geothermal Wind PV Total: 260,498 GWh

Area: 1,964,375 km2 kwh/m2 day Global Solar Irradiation in Mexico

Gigawatts 120 100 101,0 80 70,0 60 40 40,0 20 0 23,6 15,7 9,4 0,6 0,7 0,8 1,0 1,2 1,5 1,8 2,3 2,9 4,0 5,4 7,0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Solar PV Total World Capacity 1995-2012

Installed Power Output Capacity, MWp 16,00 14,70 14,00 12,00 10,00 8,00 6,00 5,71 6,00 4,00 3,50 2,00 0,00 1,05 0,99 1,06 0,62 0,90 0,87 0,52 0,19 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Annual Installed PV Power in Mexico

Cumulative Installed PV Capacity, MWp 50,0 49,3 45,0 40,0 35,0 34,6 30,0 25,0 25,1 28,6 20,0 15,0 14,3 14,4 15,1 16,1 16,6 17,6 18,5 19,4 10,0 5,0 0,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Cumulative Installed PV Capacity in Mexico

Total Population in Mexico (2012): 116.9 millions People without electricity: 2,200,000 (2%) in 70,000 remote and isolated communities with population less than 200 inhabitants. Rural Electrification

Off Grid Applications

Contract between CFE (Federal Electricity Commission) and the supplier of energy, according to the law adopted in 2010 - Indefinite Term - Schemes: Self supplier and small producer - Residential sector: maximum 10 kw - General service low voltage: maximum 30 kw, < 1 kv - General service medium voltage: 500 kw, < 69kV - Small producer: 30 MW - Net metering Grid Tie PV Systems. Legal Framework

220 low income homes with 1020 W PV Systems in Baja California (2006-2007)

Recent PV Projects 1 MW PV Park. Santa Rosalía, Baja California Sur

1 MW PV System Layout. Sta. Rosalía, BCS

- 1.5 MW Poly-Si. Single axis. - 1.5 MW Thin layer. Single axis. - 1 MW Poly-Si. Dual axis. - 1 MW CPV. Concentration. Dual axis PV Park. 5 MWp Cerro Prieto, B.C. 2012

Granite Chief and SolFocus Partner to Bring Advanced Solar Technology to Mexico Construction to start this year on Mexico's largest concentrator photovoltaic power plant SAN JOSE, Calif., October 12, 2011 Granite Chief and SolFocus today announced their partnership to bring solar power plants to Mexico. These power plants will be based on Concentrator Photovoltaic (CPV) technology, which provides high efficiency in converting sunlight to electricity. As a local Mexican renewable energy developer, Granite Chief will lead the deployment of projects in various market sectors, and SolFocus will provide the technology to deliver dependable, low cost solar energy to its customers. As its first project of scale, Granite Chief will install a 1 megawatt (MW) CPV solar farm in Apaseo el Grande, Guanajuato. This solar farm will incorporate 113 SolFocus SF-1100S CPV systems, and will provide power to Granite Chief's factory. Construction on the plant will begin in late 2011, with completion early next year. "This power plant alone will provide about a 25 percent increase in the operational capacity of solar energy in Mexico," said Granite Chief CEO Fernando Arriaga. "Installation of this plant at our own factory provides an excellent return to the company in reduced energy costs, and also showcases the potential for similar plants across Mexico. With the excellent generation capability of SolFocus CPV, we can provide customers a dependable electricity supply with predictable energy prices." He added, "We anticipate deploying up to 20 MW of SolFocus CPV over the next 24 months - these projects are just the start for solar energy in our country."

First 50 Megawatts of Large Solar Power Plant in Baja California, Mexico Enabled by Cross-Border Collaboration Grupo Musa and Synergy Technologies Partner to Provide Solar Energy to Northern Mexico with SolFocus Advanced Concentrator Photovoltaic (CPV) Solar Equipment Tijuana, Baja California, Mexico and San Jose, California, USA, March 29, 2012 SolFocus, Inc. joined today with Mexican land and real estate developer Grupo Musa and U.S.-based energy developer Synergy Technologies, LLC to announce the launch of a landmark solar power plant in Baja California near Tecate, Mexico. The project, planned as a 450 megawatt total capacity, will be built in 50 megawatt tranches, with construction on the first tranche starting in late 2012 and being operational before the end of 2013. The power plant, which will use SolFocus Concentrator Photovoltaic (CPV) equipment, will be owned and operated by SolMex Energy S.A. de C.V., the new company formed by Grupo Musa and Synergy Technologies for the production of clean solar energy in Mexico

PV System 1.2 MW. Factory ABB in San Luis Potosí. October 2012.

Electricity Rates in Mexico 37 different electricity rates in Mexico: Residential (1, 1A, 1B, 1C, 1D, 1E, 1F, DAC) Public service : < 25 kw and > 25 kw low voltage. Street lighting Agricultural Irrigation Temporary Service General purpose (low, medium and high voltage) Factors to set electricity rates: - Time (basic, intermediate and peak), regional and seasonal issues

Subsidies on Fuel and Electricity in Mexico 2011 - Fuels subsidies: gasoline and diesel: 12.2 LP gas (propane): 3.3 - Electricity subsidy: 8.3 Total: 23.8 billions dollars US

Sectors with High Electricity Rates and Number of Users Use Rate Type Cost USD/kWh Users Number Residential DAC 0.29 511,472 Commercial 2 0.21 3,442,014 Public Service 5 0.20 10,841 Public Service 5 A 0.16 135,889 Source: SENER, 2010-2011

Current State Of Renewable Projects in Mexico 2012 BIiogas 45.4 1% Wind 3,410.1 75% The Energy Regulatory Commission (CRE) has authorized to 138 suppliers to install 4524.6 MW renewables projects Biomass 596.0 13% PV 67.7 2% Hydro 405.4 9% MW approved 93 projects have been installed with a capacity of 1844.4 MW. Biogas 44.8 2% Wind 1,127.7 61% Biomass 532.7 29% MW operating PV 1.0 0% Hydro 138.3 8%

Potential of Renewables in Mexico

National Energy Strategy 2013-2027 Main actions: - Promote energy efficiency ENE 1/2 - Encourage the production, distribution and consumption of natural gas, especially for electricity generation - Increase the nuclear contribution in the energy matrix - 35% of renewables for electricity generation in 2024 - Foster distributed generation - Provide power to remote rural communities - Production of biofuels

National Energy Strategy 2013-2027 Main actions: - Human Resource Development ENE 2/2 - Adequate Regulatory Framework with fiscal and economic instruments. Selective incentives for Renewables. - Wind Projects Development on the Coasts - Expand and improve the electricity transmission and distribution lines - Promote effective entailment between universities, research centers and industries - Incorporate externalities and cost of emissions greenhouse gases in fossil fuel projects

Challenges and Opportunities - National Energy Reform that promotes energy efficiency and renewables will be discussed at the Congress in the second half of this year - Current average cost of electricity from CFE between 10 to 14 cents of US dollar per kwh. High DAC, commercial and public services rates (0.20-0.29 USD/kWh) - Drastic reduction of the cost of the PV Watt in the international market - Trend of annual increase in electricity and fuels rates in Mexico and gradual reduction of fossil energy subsidies.

Challenges and Opportunities - Financing for renewables projects by Mexican banks, offer high interest rates and limited experience in this field. The funding sources for current photovoltaic projects come from international institutions (IDB/IFC) and banks - Green programs in the residential, commercial and industrial sectors - Greater awareness of environmental protection.

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