First Solar, Inc. (NASDAQ:FSLR) Get First Project as Mexico is ready to allow foreign oil extraction

For the first time in 75 years Mexico is ready to allow foreign oil extraction for finding its rich natural resources.

First Solar, Inc. (NASDAQ:FSLR) is the first company of U.S. who has bought its first project in Mexico and several other extractors like Germany’s Saferay GmbH and Grupotec Tecnologia Solar SL of Spain also possess licenses there.

Chief Executive Officer of Gauss, Hector Olea said that this project will open the doors for the development of the photovoltaic sector.

Mexico holds a position in top 10 oil producer and by the end of 2026 is planning to generate 35 percent of its power from clean sources. Additional solar panels globally made them cheaper and expensive oil-fired plants make solar a competitive option. Most of the Mexico’s clean energy comes from hydroelectric stations. Wind and solar contribute 1.5 percent of total power output. Local and foreign companies have combined initial permits for 215 megawatts of solar plants, mostly in Mexico’s sunnier northern regions. This would increase the country’s solar capacity more than fivefold which is enough to power more than 40,000 homes. The Energy Ministry predicts solar capacity about 2,170 megawatts and also 10-fold growth by the end of the decade.

With the funding from International Finance Corp and Nacional Financiera SNC bank Gauss and Martifer started a 30-megawatt plant in La Paz, Baja California, on Sept. 12.

Bloomberg has forecast that solar industry allows the country to complete large-scale projects of total of 70 megawatts for current year, 125 megawatts in next year and 120 megawatts in 2015. Solar energy benefits commercial customers as well as high-use residential consumers who pay high electricity rates in the sense of economically.

As solar now makes economic sense for users, long term, residential and commercial-size projects are place in the country. The sunshine in Mexico which is the world’s largest market has also produce in rooftop solar because of average radiation is 60 percent higher than Germany.

According to Gauss, Solar power plants still remains uncompetitive in most areas of Mexico because average cost of power generation is about 12 cents a kilowatt per hour in the country.

CEO of the New Energy Ventures LLC Stuart Smits said that for completion of large projects more funds are needed. In order to stay in the business the company plans to produce 2-megawatt to 3-megawatt for Mexican municipal authorities. He said few solar deals are needed to make its price competitive and in gaining confidence of the investors.