Financing Schemes for Residential, Grid-Connected Pv Solar Systems in Bcs, Mexico

Financing Schemes for Residential, Grid-Connected Pv Solar Systems in Bcs, Mexico

A. Bermudez-Contreras A. Ivanova-Boncheva 

Department of Fisheries Engineering, Universidad Autonoma de Baja California Sur, Mexico

Department of Economics, Universidad Autonoma de Baja California Sur, Mexico

| |
| | Citation



This article presents two proposals to spur the extensive adoption of grid-connected, residential, solar photovoltaic systems in the Mexican state of Baja California Sur. To this aim, electricity generation costs and subsidies were estimated first, together with time-of-generation avoided costs that could result from the implementation of such solar systems. An overview of financing mechanisms for solar and other renewable energies around the world is also presented followed by current mechanisms available in Mexico. The first proposal is centered around the operation of a solar energy service company that would receive the avoided cost of generation as compensation in return for sourcing, installing, and maintaining solar PV systems on residential users’ roofs. This would free up the residential user from any future electricity payments. The second proposal consists in the implementation of a feed-in tariff (FiT), currently unavailable in Mexico for residential users. The FiT could be funded from the avoided generation cost in conventional plants plus the corresponding savings from self-generation of electricity. Alternatively, the option of funding the FiT from small increases in electricity prices to all customers was also explored. Present value analyses suggest that both proposals are worthwhile pursuing in Baja California Sur.


Baja California Sur, feed-in tariff, financing, grid-connected, Mexico, photovoltaics, solar


[1] INEGI, Principales resultados del Censo de Población y Vivienda 2010, 2011, Available at 02042&s=est&tg=320&f=2&pf=Pob&ef=00&cl=0. Tasa de crecimiento poblacional nacional (accessed 2 July 2012).

[2] CFE, Programa de Obras e Inversiones del Sector Eléctrico 2012–2026, Available at (accessed: 22. April 2013).

[3] CFE, Programa de Obras e Inversiones del Sector Eléctrico 2011–2025,available at (accessed: 19. February 2012).

[4] IPCC, Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge University Press: Cambridge, UK and New York, NY, USA, 2007, ISBN 978-0-521-70598-1.

[5] IEA, Key World Energy Statistics, 2012, Available at (accessed 21 September 2012).

[6] IPCC, IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation, Cambridge University Press: Cambridge, UK and New York, NY, USA, 2011.

[7] Bermudez-Contreras, A., Ivanova Boncheva, A. & Martinez De La Torre, A. A methodology to estimate the potential of grid-connected PV residential systems for greenhouse gas emission reductions, The Sustainable City IX, In: eds. N. Marchettini, NC.A., Brebbia, C.A.R., Pulselli, R. and & S. Bastianoni, S., eds.WIT Press, 2014, (accessed: 26. October 2014). doi: 10.2495/SC140922

[8] Bermudez-Contreras, A., Thomson, M. & Infield, D.G., Renewable energy powered desalination in Baja California Sur, Mexico. Desalination, 220(1–3), pp. 431–440, 2008. ISSN 00119164: doi: 10.1016/j.desal.2007.01.046

[9] Bermudez Contreras, A.S., Energías renovables para la generación de electricidad en Baja California Sur, Baja California Sur ante el cambio climático: Vulnerabilidad, adaptación y mitigación, In:eds. A. Ivanova, A., and A.E. Gámez, A.E., eds., UABCS: La Paz, pp. 384–415, 2013. ISBN 978-607-7777-32-8.

[10] Ghosh, D., Shukla, P.R., Garg, A. & Ramana, P.V., Renewable energy technologies for the Indian power sector: mitigation potential and operational strategies. Renewable and Sustainable Energy Reviews, 6(6), pp. 481–512, 2002. ISSN 1364-0321: doi: http://

[11] Sims, R.E.H., Rogner, H.-H. & Gregory, K., Carbon emission and mitigation cost comparisons between fossil fuel, nuclear and renewable energy resources for electricity generation. Energy Policy, 31(13), pp. 1315–1326, 2003. ISSN 0301-4215: doi: http://

[12] Winkler, H., Hughes, A. & Haw, M., Technology learning for renewable energy: implications for South Africa’s long-term mitigation scenarios. Energy Policy, 37(11), pp. 4987–4996, 2009. ISSN 0301-4215: doi: enpol.2009.06.062

[13] Mathiesen, B.V., Lund, H. & Karlsson, K., 100% Renewable energy systems, climate mitigation and economic growth. Applied Energy, 88(2), pp. 488–501, 2011, ISSN 0306-2619: doi:

[14] McHenry, M.P., A technical, economic, and greenhouse gas emission analysis of a homestead-scale grid-connected and stand-alone photovoltaic and diesel systems, against electricity network extension. Renewable Energy, 38(1), pp. 126–135, 2012. ISSN 09601481: doi: 10.1016/j.renene.2011.07.020

[15] Mahesh, A. & Shoba Jasmin, K.S., Role of renewable energy investment in India: an alternative to CO2 mitigation. Renewable and Sustainable Energy Reviews, 26, pp. 414– 424, 2013 (accessed 10 October 2013). ISSN 13640321: doi: 10.1016/j.rser.2013.05.069

[16] Narbel, P.A., What is really behind the adoption of new renewable electricity generating technologies? Energy for Sustainable Development, 17(4), pp. 386–390, 2013. ISSN 0973-0826. doi:

[17] Schmid, E., Pahle, M. & Knopf, B., Renewable electricity generation in Germany: a meta-analysis of mitigation scenarios. Energy Policy, 61, pp. 1151–1163, 2013. ISSN 0301-4215: doi:

[18] REN21., Renewables 2013 Global Status Report, REN21 Secretariat: Paris, 2013. ISBN 9783981593402:

[19] Šúri, M., Huld, T.A., Dunlop, E.D. & Ossenbrink, H.A., Potential of solar electricity generation in the European Union member states and candidate countries. Solar Energy, 2007, 81, pp. 1295–1305, Available at (accessed  27. July 2011).

[20] CFE, Despacho y Control de Energía, 2014, Available at caciones/OTROS/costostotales/ConsultaArchivoBalance.aspx (accessed 5 April 2014).

[21] IEA and IRENA, IEA/IRENA Joint Policies Database, 2013, available at http://www. (accessed 1 August 2014).

[22] REN21, Renewables 2014 Global Status Report, REN21 Secretariat: Paris, 2014, Available at full report_low res.pdf ([accessed: 11. August 2014].). ISBN 9783981593426.

[23] Jacobs, D. & Sovacool, B.K., Feed-in tariffs and other support mechanisms for solar PV promotion, Comprehensive Renewable Energy, Sayigh, A., ed., Elsevier, 2012, pp. 73–109. ISBN 9780080878737: doi: 10.1016/B978-0-08-087872-0.00104-9

[24] Moner-Girona, M., Szabo, S. & Rolland, S., Finance mechanisms and incentives for photovoltaic technologies in developing countries, Comprehensive Renewable Energy, Sayigh, A., ed., 2012. ISBN 9780080878720: doi: 10.1016/B978-0-08-087872-0.00148-7

[25] Porter, D., Renewable energy policy and incentives, Comprehensive Renewable Energy, In: Sayigh, A., ed. 2012, pp. 1–4. ISBN 9780080878720: doi: 10.1016/B978-0-08- 087872-0.00901-X

[26] LSPEE, Ley del Servicio Público de Energía Eléctrica, Electric Energy Public Ser- vice Law, Presidencia de la República, 1975, available at LeyesBiblio/pdf/99.pdf

[27] LASE, Ley para el Aprovechamiento Sustentable de la Energía, Sustainable Energy Usage Law, Presidencia de la República, 2008, available at http://www.diputados.gob. mx/LeyesBiblio/pdf/LASE.pdf

[28] CFE, Comportamiento de los contratos de interconexión en pequeña y mediana escala, “Low and Medium Scale Interconnection Contracts’ Performance”, CFE, 2013, Available at (accessed 11 March 2013).

[29] ProMéxico, Energías Renovables, Renewable Energies, Unidad de Inteligencia de Negocios: México, 2013.

[30] LAERFTE, Leyparael Aprovechamientodelas Energías Renovablesyel Financiamiento de la Transición Energética, Renewable Energies Exploitation and Energy Transition Financing Law, Presidencia de la República, 2008, available at documento/1523.pdf

[31] SENER, Prospectiva de Energías Renovables 2013–2027, 2013, available at http:// pdf (accessed 2 April 2014).