SOLAR DEVELOPMENT IN MEXICO: WHAT IS THE BEST STRATEGY?

Abstract

In the past couple of years, solar generation has been a fast growing market worldwide, especially in countries such as the U.S., where there are numerous federal and state incentives. The solar market in the U.S. is becoming highly competitive as a consequence of these governmental incentives. Hoping to offset any business losses from potential reductions in U.S. federal solar incentives, several American solar companies are now evaluating expansion into international markets. Mexico has been one of the international markets under the spotlight given its high solar irradiation, high electricity prices, and high national renewable energy targets. This business case study examines an American company’s strategic analysis of expansion opportunities in Mexico. The evaluation examines market segments, partnership options, and financial strategies. Based on a year of development efforts, this company (RER Energy Group) has to decide how to position itself in this emerging solar market.