The Federal Finance and Administrative Court of Mexico announced last week that it would cancel the import tariff of 15% of solar PV modules.
This tariff was introduced by the Mexican Tax Administration (SAT) in 2015. The court accepted the appeal of the Mexican Solar Energy Association (AsOMMEX) in October 2016 that identified the tax as illegal because SAT claimed that the solar module itself is a generator, not a component in the power system.
The cancellation of this tariff, together with the expected decline in the prices of solar modules, is very likely to promote the development of Mexico this year and next, and may even lead to the reconstruction of solar projects that were selected in the last three years of electric auctions but were abandoned. .
AsOMMEX Director-General Israel Hurtado confirmed that some "unprofitable" projects may now become attractive again. "As the price of components decreases, many projects can be restructured and refinanced." He said that the cost of the panel accounts for 50% of the total cost of a large-scale solar project, while a price reduction of more than 30% can save the entire project by 15%.
In addition, Hurtado believes that 2018 will be a record year for the photovoltaic industry, and that Mexico's new installed capacity may reach 1 GW. The association’s forecast for the next six years is 6.6 GW but Hurtado said it does not rule out the possibility of raising this forecast.