The SREC (Solar Renewable Energy Credit) customer support team at Sol Systems provides in-house services and assistance to more than 18,000 customers and partners. Our Service Spotlight Series gives our clients the chance to learn more about the individuals that support their SREC payments. Today we chatted with our SREC Customer Support Manager, Aina Lusis.
Aina Lusis is a SREC Customer Support Manager on the customer support team.
1. What brought you to Sol Systems?
I came to Sol because I wanted a change of pace and environment. There is a nice balance between work environment and work ethics at Sol Systems. Sol’s great culture stems from open communication with a work hard, play hard mentality. This fosters an incredibly supportive environment with open dialogue and cross team collaboration at the forefront.
2. How have your previous roles prepared you to transition to your current role on the customer service team?
My psychology degree gave me a boarder understanding of how people think, emphasize, and communicate. After college, I put my focus into politics and campaign work, which required me to talk to different constituents about various subject matters, giving me a solid understanding of the person behind the screen as well as the information at hand. In my previous job, I used my background to create positive experiences for customers through communication practice, relationship building, and personability.
3. What motivated you to pursue a career in renewable energy?
I have always been passionate about environmental issues, and when I found Sol, I knew that this opportunity came at the right time. From there, everything fell into place.
4. What processes are you looking to build from at your current position as a customer service manager?
First and foremost, I want to focus on faster communication with customers. This includes testing new procedures and exploring a variety of communication options. At the current moment, my focus is maintaining positive communication and quality customer service in a meaningful way by giving customers accurate information quickly and effectively.
5. Outside of Sol Systems, what do you like to do for fun?
When I am not working, I like to sing and dance and am currently working on a novel. I am also a movie buff. When the weather permits, I enjoy hiking in the mountains or spending time at the beach.
Summer at Sol Systems: Success Stories of Sol’s Internship Program
Company Culture |
By The Sol Systems Team
Every summer, Sol Systems provides an opportunity for students that are passionate about the environment, sustainability, and renewable energy, to join us for our Summer Intern Program. During this time, we offer roles across our various teams such as Structured Finance, Asset Management, Investments, Business Development, Engineering, and more.
Our interns develop skills to succeed in the solar industry while building relationships and forming a community of peers within the world of renewable energy. Exemplifying this, are our many former interns that have moved into full-time roles at Sol. As we approach our 2022 Summer Intern Program (which we’re hiring for!), we asked a few of these former Sol interns about their experience, as well as advice for those looking to join our intern program in the future.
Callie Sofis-ScheftJosh KleinLauren Aycock
When did your internship with Sol begin? What was your greatest takeaway from the experience and what did you appreciate the most?
Callie - I started interning at Sol Systems in October 2020. Due to the pandemic, I was virtually onboarded during that fall. I was so appreciative of the warm welcome that I received even though everyone was virtual. I had the opportunity to go on “coffee chats” with members of my team and other teams throughout Sol. This allowed me to make connections across the company and learn about my colleagues’ current and previous experience in the industry. Everyone I spoke with was so kind and willing to support my transition into my intern role in any way they could.
One of my greatest takeaways from my internship at Sol was my ability to learn and better understand the different facets of the solar industry. While I had some previous solar experience in a policy-focused role, the opportunity to learn from and directly interact with the different business lines at Sol provided me with a more holistic understanding of the key components of the solar industry and the ways in which it’s constantly evolving.
Josh - I started my internship January 2021 on the Sol Customer Solutions (SCS) team (Sol’s Commercial/Industrial Development Wing), where I worked as a Business Development Analyst. Throughout my internship, I analyzed potential DG scale projects solar plus storage projects, responded to RFPs, and assisted in outreach to potential customers. SCS immediately took me under their wing and treated me as a friend and colleague. Sol really takes the time and effort to train their interns and teach them valuable skills in the solar space. When I joined, I had little confidence in my Excel abilities and my knowledge in solar was limited to one market. At the conclusion of my internship, I knew several markets at an expert level and was fully capable of modeling complex portfolios in Excel. I will forever be grateful for everyone on the SCS team who helped take the time to teach me and shape me into the renewable energy professional I am today.
Lauren -I first joined Sol as a Project Delivery Intern in the summer of 2018, returning to that role in 2019 before transitioning to the engineering team, where I eventually joined full time as a Development Engineer.
I walked away from my first summer at Sol knowing I wanted to stay in the solar industry, which was a huge accomplishment after three years of indecision in undergrad. At the end of my internship, I had a better idea of what areas of solar I was interested in, what questions to ask, and gained a better understanding of the industry as a whole. One of the things I appreciated the most was the sense of community in the office. I worked with a fantastic team who taught me a lot and were always happy to answer my (very many) questions. To this day, as it was when I was an intern, my team makes me excited to come to work each morning.
How was your role at Sol different from other intern roles you’ve held in the past?
Callie - A special part of Sol’s internship program is the opportunity to work on a variety of projects and gain real responsibility. You are not brought on as an intern to do mindless, miniscule tasks. When you show that you are intellectually curious and motivated to learn, you have the unique ability to work on and own projects. As an intern, I had the privilege of working on projects in multiple environmental commodities markets during which I spoke directly with clients, created and shared weekly reports, wrote blog posts, and much more.
Josh - Sol Systems will give you work that will make you a serious value add to the team. In the past, I had interned in the public and private sector for renewable energy developers, feeling pigeonholed by doing data entry tasks or tasks that were mundane. At Sol, I was thoroughly trained and then given challenging projects that made me feel needed and important. My manager took genuine interest in my feedback and placed me on projects that excited me. Sol values its interns and believes in them.
Lauren -Through my internship at Sol, I learned how each business unit functioned, which helped me understand the ins and outs of the industry. Sol organized presentations for each week for the interns to get to know everyone and what they did at the company. That insight was not something I had seen at past internships and was valuable in helping me succeed at my role. It also made my work feel more meaningful and gave me the information to figure out where I would fit in best when I entered the industry full time.
What advice would you give to prospective interns?
Callie - My biggest piece of advice for a prospective intern is to come in with the excitement to learn. There are so many incredible opportunities to learn about the solar industry, colleagues’ career experiences, and what it’s like to work in an exciting, fast-paced environment. Try to talk with many different people throughout the company and don’t shy away from asking questions. The Sol Team wants to support you and see you succeed in your role!
Josh - Come to Sol ready to learn. Everyone at Sol is incredibly smart and approachable. Don’t be afraid to ask questions or to set up coffee chats with people who are not on your team. Everyone wants to see you succeed and will help you work on projects that spark your interests. They will also be able to tell you about their own experience in the solar industry, as well as giving you the down-low on some must visit spots in DC!
Lauren - Learn as much as possible and involve yourself in projects or initiatives that interest you. Don’t be afraid to ask questions, learn about what other teams are doing, and dig in deeper on the aspects of your internship that interest you the most. You’ll get out of it what you’re willing to put in, even if that means stepping out of your comfort zone.
Sol’s summer intern program runs from May to August with many interns staying on board throughout the year. If you have are interested in applying to our summer intern program, check out the open roles on our careers page, or reach out to our HR team at hr@solsystems.com if you have any questions.
The U.S. Congress had a busy late 2021, enacting the most significant infrastructure investment in generations, among other accomplishments. However, industry attention remains focused on the remaining half of the economic and social investment package termed “Build Back Better” (BBB) that has thus far run aground on unified Republican opposition and two Democratic holdouts. Because the legislative package is designed to pass under a budget-related process known as reconciliation that requires a simple majority for passage and is thus protected from certain filibuster, BBB could pass with unified Democratic support (and Vice President Kamala Harris’s tie-breaker vote).
Senator Joe Manchin (D-WV) is the primary block, citing myriad and shifting objections, notably the recently expired child tax credit and any meaningful carbon-reduction policy such as taxes, fees, or payments to close fossil generation. He does, however, appear open to supporting the clean energy incentives included in previous legislative drafts (Senator Sinema (D-AZ), the other holdout, appears to support the clean energy provisions already). Thus, we could see the clean energy provisions form the core of a stripped-down BBB that is able to pass by the February budget deadline. President Biden recently stated his support for this approach.
What’s Actually in the Bill?
The extension and expansion of the Investment Tax Credit (ITC) contained in previous drafts of BBB is of vital interest to the solar industry and, together with other tax policies for nuclear and carbon sequestration, could bridge the divide. As currently drafted, BBB would extend and expand the ITC for ten years and include other supportive technologies, such as storage and transmission, without which clean generation deployment is less effective in actually reducing emissions.
Under the BBB, the “base” ITC available to any qualifying solar project would revert to 6 percent, rising to 30 percent for projects that meet prevailing wage and apprenticeship requirements. Wage and apprenticeship requirements would apply during construction as well as for labor on repairs or alterations during the five-year ITC recapture period, unless demonstrably unavailable. As shown in the chart below, paying prevailing wages opens up much higher incentive rates.
As currently written, bonuses would be also available for sufficient use of domestic content, supporting environmental justice communities, and for facilities in qualifying “energy communities” where a coal mine or a coal-fired electric generating unit has been shut down—or will be.
Finally, two important caveats: Direct payment of the ITC is proposed for projects beginning construction after 2023 if domestic content requirements are satisfied—potentially a significant incentive for projects that struggle with traditional financing options, such as municipal utilities. Also, projects smaller than 1 MW net output would be exempt from the wage and apprenticeship requirements for the full proposed ITC.
What Already Passed?
Lost in the focus on the BBB drama are the truly transformative investments in the Infrastructure Investment and Jobs Act (IIJA) signed by President Biden on November 15, 2021, including a number of significant energy-related items. Notably to our industry, the IIJA provides significant funding and additional regulatory authority to increase electrification across transportation and building sectors and to build the regional transmission network necessary to power this shift with clean electricity.
Several provisions aim to shore up the aging electrical grid for increased electrification demand even as it is increasingly threatened by modern cybersecurity and climate change-induced extreme weather threats. These include grants to improve resiliency for weather disasters, improve grid resilience, smart grid, and for resilience and environmental protection improvements in rural areas. As much as $2.5 billion in loans are now available for the Department of Energy to support construction of nonfederal electric transmission lines and participate in the design, operation, and ownership of projects, which could alleviate some “first mover” intertia to getting new lines started. The law also requires electric utilities to promote use of demand-response and demand flexibility practices to reduce consumption of grid electricity during periods of unusually high demand, offering a significant incentive to developers who can pair solar and storage to shift solar “consumption” to match.
The new law also contains several elements designed to transform the transportation sector. The measure allocates $6.42 billion for a new program to reduce transportation-related carbon emissions, with eligible projects including truck stop electrification systems, congestion management technologies, and intelligent transportation system capital improvements. The law also offers $5 billion over five years to replace school buses with electric or zero-emission buses and $250 million for electric or low-emission ferries, bringing the benefits of clean transportation to some of the most vulnerable Americans.
The law also offers funding to other low-emission vehicles, electric vehicle charging stations, and alternative fuel infrastructure, with some funding prioritized for rural areas, low- and moderate-income neighborhoods, and communities with less access to private parking.
One final provision requires that any projects funded under the law’s energy provisions must pay prevailing wage, a requirement that we expect to continue to be in play for other publicly-supported projects under the Biden administration and increasingly at the state level, such as Illinois’s recent landmark Clean Energy Jobs Act.
How Do We Get There from Here?
As we enter 2022, the solar industry is watching intently as negotiations continue to convince Senator Manchin to make these historic and crucial investments in 21st century social, economic, and energy infrastructure. If BBB succeeds, the U.S. will be poised for unprecedented – and unprecedentedly equitable – growth in clean energy and domestic manufacturing, setting up decades of increasingly sustainable growth and international competitiveness.
Mexican Energy Reform Update: Solar Industry Awaits Answers
Policy |
By The Sol Systems Team
Building off of our previous summary, of President Andrés Manuel López Obrador's (AMLO) recent Mexican energy market reforms.
As a reminder, the reforms were proposed as AMLO’s most recent attempt to reassert control over the Mexican energy landscape – a move highly criticized across the world. As a result of this criticism and opposition to the proposed reform, AMLO’s proposal is on hold for now awaiting potential governmental action and public debate.
This week, public debate began in Mexico’s Chamber of Deputies (analogous to the U.S. House of Representatives), centered on the proposed changes to the Mexican constitution that could significantly reduce competition within the Mexican energy sector. The proposed reforms would put $22 billion in clean energy investments at risk. AMLO’s National Regeneration Movement (MORENA) is pushing the debate in what we can only gather is a hope to attempt passage of the package before the end of the current legislative session in April 2022. To pass, the package will require a two-thirds majority vote in the Chamber of Deputies, Senate, and at least 17 local congresses. Adding to the political volatility of the situation, AMLO announced that he also plans to hold a recall vote on his term in March 2022 to solidify his power and bolster his mandate to take action on the proposed reforms. Officials in MORENA believe that winning that referendum will lend legitimacy to efforts aimed at securing constitutional change.
What seems clear is that the ALMO’s primary focus remains on fossil fuel generation as the backbone of Mexican economic development at the expense of renewable energy. This reality could set in motion one of the largest international hurdles faced by renewable energy developers and large energy buyers in 2022.
Reform Consequences & Pushback
The delay was driven in-part by concerns raised by many stakeholders that ALMO’s proposed reforms are likely to violate international agreements, harm domestic economic development, reduce investor confidence, and could lead to dirtier and more expensive electricity. A recent NREL draft study predicted that the reforms would increase carbon emissions between 26 and 65 percent, raise electricity generation costs between 31.2 percent to 52.5 percent, and also increase the probability of power outages by 8 percent to 35 percent. The results of the NREL study in all three scenarios offer reason for caution.
In November, together with Cecilia Patrón, the Secretary General of the Partido Acción Nacional (PAN), the opposition party, stood firm against the reforms, stating that PAN is “opposed to the electricity reforms as they are currently drafted and Mexican families know that, because it would cause a price spike for electricity bills by increasing state control.” In the private sector, Pablo Zárate of FTI Consulting said that, “the reform – which AMLO needs opposition lawmakers to approve – also puts supply chains at risk, as companies may not be able to decarbonize their operations in Mexico to meet international commitments.” In response to a question on the politics at play, Zárate said“There are [political] actors seeking to negotiate, changing a comma or something in the margins, but this is distracting from the main considerations and implications of the reform.”
In the U.S., lawmakers in both parties have urged the Biden Administration to oppose the proposed reforms. Earlier this month, Senator Robert Menendez, Chair of the Senate Foreign Relations Committee, and three other Democratic Senators authored a letter urging Secretary of State Blinken and Secretary of Energy Granholm to oppose the reforms. The Senators not only objected to the climate implications, but argued portions of the proposal would contradict portions of the United States-Mexico-Canada Agreement (USMCA) designed to reduce national security concerns around critical mineral scarcity as well as threaten “$44 billion in private investment.” In the fall, a bipartisan group of Texas Senators and Representatives sent a letter decrying “recent actions taken by the Mexican administration to favor state owned enterprises (SOEs) and push out American investment,” highlighting that the proposed reforms for violating the USMCA and called on the White House and U.S. Ambassador to Mexico Ken Salazar to take action.
Outside of the United States, the Canadian Ambassador to Mexico, Graeme C. Clark wrote a letter to the head of Mexico’s Ministry of Energy (SENER) stating that the policy “puts at risk the operation and continuity of Canadian companies’ renewable energy projects in Mexico.”
Corporate Impact
These proposed energy reforms have unnerved foreign investors and large corporates operating in Mexico. Sarah Birke, The Economist’s Bureau Chief for Mexico, believes that the reforms will not only lead to “dirtier and more expensive power,” but that it would “damage investor confidence beyond the energy sector.” This is in part due to the damage this would do to many multinational businesses’ ESG goals. One such business is General Motors, whose Mexico Chief announced the American automaker would halt all investments in Mexico unless there were laws that promote renewable energy, threatening to claw back their announced investments of over $1 billion in electric vehicle production in Mexico beginning in 2023. At the same time, Fitch Ratings recently announced, “the energy initiative proposed by Mexico’s President López Obrador to amend the constitution would result in negative rating actions to private power projects were it to become law.” It is clear the proposed energy reforms have unnerved foreign investors and large corporates operating in Mexico, and could alter business’ ability to procure clean and competitively priced electricity.
As detailed more thoroughly in Sol’s previous article on the Mexican energy market, there is tremendous opportunity for growth in the Mexican renewable energy . While at this point, new utility-scale solar and wind projects are at a standstill, the distributed generation market continues to grow given robust customer demand and a strong domestic demand for solar.
Next Steps
As public debate on the reforms begins, key issues to follow include:
The market structure created by the 2013 Energy Reform
The State’s role in the power sector
The goals of the 2013 reform and the results
The constitutionality of the 2021 reform
The environment and energy transition.
With the debate in full swing, U.S. Secretary of Energy, Jennifer Granholm is in Mexico meeting with her counterpart, Mexican Energy Minister Rocio Nahle on potential solutions. AMLO has publicly stated that he will meet with Secretary Granholm and, “will provide information on why we need the proposed electric power reform.” Secretary Granholm issued a statement ahead of the talks saying she sees a “great opportunity” to work “towards decarbonization as a North American block.”.
As of today, it appears robust stakeholder pushback has succeeded in preventing the quick passage of ALMO’s energy reforms. However, we will be closely monitoring developments to ensure any reforms promote, rather than hinder, decarbonization and the buildout of renewable energy.
Women in Power: The Team Behind Nebraska’s Largest Solar Project
Company Culture |
By The Sol Systems Team
The solar industry is beginning to take steps to diversify and create new leadership and professional development pathways for women. At Sol Systems, we are completing our first project led by an all-woman development team. It is also Nebraska’s largest solar project and Nebraska Public Power District’s (NPPD) first battery storage project.
The project is an 8.5MW community solar project with 1MW battery storage in the City of Norfolk and was developed by a partnership that includes Sol Systems, GenPro, and Menser Development. Anna Noucas, Director of Origination, led the competitive RFP process submission and contract negotiations after the project was awarded. Anna’s initial Norfolk team consisted of Jill Rathke - Business Development Associate, Lauren Aycock - Project Engineer, and Erin Hickok - Senior Investment Analyst.
As the project moved into the development phase, Bridget Callahan, Project Development Manager, led the coordination of site studies and the project’s interconnection process with NPPD to ensure a smooth financing and construction process. From there, Meg Pieper, the Pre-Construction Manager, helped set construction timelines and worked to ensure project goals and needs were communicated and agreed-on by the project partners to lead the way to commercial operation, anticipated to be achieved in the spring of 2022.
Not only is this project going to be NPPD’s first solar-plus-storage project, but it is also paired with positive community and environmental impact. The project is part of NPPD’s SunWise program, a community solar initiative where customers who sign up to obtain a share will receive an electricity bill credit. The credit allows customers to benefit from solar without the upfront cost of building a solar system on their property.
In addition, the project incorporates an on-site pollinator habitat to support the local ecosystem and local pollinator populations, like bees. The inclusion and design of the pollinator habitat was completed by performance engineer Juliana Isaac. Once the project is operational, students in the Electrical Construction and Control Program at Northeast Community College, Norfolk’s local community college, will work alongside project operators and partners to gain onsite and practical solar experience. As a part of the project, the collective will provide three scholarships to students participating in the internship program, an initiative organized by Sol’s Marketing Coordinator, Claire Siwulec.
The women that designed, developed, and built the Norfolk project took charge during the COVID-19 pandemic and created a highly efficient, effective, and flexible team. The Norfolk project leaders exemplify the added value of female leadership within the industry. With women comprising only 30% of the solar workforce, there is still so much work to be done, but we hope the story of Norfolk can inspire companies to act to further the progress being created today.
Mexico’s Energy Reform: Retreating from Private Energy Markets
Policy |
By The Sol Systems Team
Mexican lawmakers are close to dismantling the national renewable energy market by acting to pass a constitutional reform proposal that would fundamentally change the Mexican national power sector leaving renewable energy buyers and developers with nowhere to turn. The proposal would devastate the energy market in the eleventh largest economy in the world.
Despite increasing corporate and consumer demand for new Mexican renewable energy, the current administration is pushing hard to pass the constitutional proposal. In essence, the proposal would renationalize the Mexican power industry and set Mexico on a backward slope, potentially erasing decades of progress in its journey to clean energy.
Current Mexico Market
In 2014, Mexican energy reform policies, while not perfect, opened the door for private energy firms to participate in the power sector. It created a wholesale market, independent system operator (ISO), and created one of the most competitive global solar markets – largely driven by corporate and customer demand.
Yet, after the election of President Andrés Manuel López (AMLO), the 2014 energy reform policies have been re-branded as a threat to the state-run electricity utility - Comisión Federal de Electricidad (CFE). It is becoming increasingly clear that AMLO is prioritizing state-owned enterprises and their legacy fossil fuel supply over a competitive Mexican energy economy. A position strongly supported and advocated for on behalf of Mexican fossil fuel monopoly and utility giants, Pemex and CFE.
Energy dominance is part of AMLO’s “Fourth Transformation” (4T) plan focused on returning economic power to the state, and as some experts have observed “change [or threaten] the very nature of Mexican identity.”[1] As a result, anti-renewable actions continue to mount, for example Executive Actions from May 2020 solidifies AMLO’s position. Shortly after AMLO was elected, the renewable energy auctions were cancelled, and it became increasingly clear that obtaining the national level permit for new renewable energy projects would be political in nature and increasingly difficult, often not possible.
Yet, one positive area of growth in Mexico has been the Generación Distribuida (DG) segment of the market – where installations less than 500 kW could receive accelerated net metering and interconnection approval. There is very strong customer demand for DG resources given both increased corporate sustainability targets and the growing concerns over rising national electricity rates.
Nevertheless, AMLO took executive action that limited large-scale solar development in favor of state-run fossil fuel entities. Yet, the Mexican Judicial branch has consistently denied his attempts to make unilateral change calling them unconstitutional. Some view the Mexican legal system as the key source of hope for the renewable energy industry during AMLO’s 6-year term limited presidential term. This hope was somewhat bolstered when during the Mexican mid-term elections AMLO’s political party - Movimiento Regeneración Nacional (MORENA) - lost several seats, although MORENA still performed well at the state level.
The New Energy Reform
The AMLO administration proposed the current Energy Reform at the beginning of October 2021, making an unprecedented attempt to renationalize the power industry, likely crippling the country’s clean energy transition and economic growth for years to come. This is evidenced by administration’s plans to table discussions on decommissioning fuel oil burning power plants, and the intention double-down on the use of PEMEX oil for power generation. This is coming from information in the energy ministry’s 2020-2024 development plan[2]. Similarly, Mexico’s increased focus on coal to generate electricity and AMLO’s acknowledged “fascination with fossil fuels” leave little doubt as to the goals and consequences of the proposed changes.
This proposed new energy reform would impose restrictions on private participation that are even more stringent than the state of the Mexican power sector prior to the 2014 Energy Reform. The proposal would make it illegal for private companies to directly procure power or self-supply energy.[3] The actions would make Mexico’s generation mix both dirtier and less reliable, likely leading to more rolling blackouts and brownouts already causing issues as energy supply growth stalls and electricity prices continue to increase.
Deeper Dive on What the New Energy Reform means?
Source: Data from Consejo Coordinador Empresarial
The new energy reform targets articles 25, 27, and 28 of the Mexican constitution with the goal of reinstating state monopoly in the electricity sector by substantially changing these sections. The reforms would re-vertically integrate the national utility CFE, folding in the CRE (the energy regulatory commission) and CNH (oil regulator) into SENER (the Cabinet Department for energy), and folding CENACE (the independent system operator) into CFE. Under the new reforms, the Wholesale Electricity Market (MEM) would be effectively eliminated as CFE would oversee dispatch, determine transmission /distribution tariffs, and all pending and existing permits for large scale generation would be cancelled along with agreements made by the public sector to purchase electricity.[4] The natural concern is that the new energy reform would remove most all independent regulatory checks and any semblance of a fair marketplace.
Moving forward, CFE would be constitutionality entitled to always generate at least 54 percent of Mexico’s electricity– theoretically leaving up to 46 percent for private generation, but there is no clear way or mechanism for private generation to sell electricity, and it is hard to imagine how investors and developers will have confidence to invest in new renewable projects given this uncertainty and CFE’s discretionary power over any project.
The proposal also ends the clean energy certificates (CELs) program – the Mexican equivalent of renewable energy credits (RECs) – a further blow to any type of market structure or incentive that would support Mexico’s renewable energy targets.
Generación Distribuida (DG)
It is still unclear how distributed generation (DG) would be affected by this proposal. The text o the energy reform does not explicitly target DG, but it does propose cancelling all private generation contracts. Given the Administration’s primary focus on eliminating the larger self-supply private generation contracts (as opposed to rooftop distributed generation) combined with previous support from CFE for DG, it could be interpreted to mean that 500 kW and smaller systems will not be substantially impacted. However, the language canceling private generation contracts potentially creates uncertainty around DG too - which will put many DG investments in limbo and make it more difficult to confidently develop DG projects. Even if DG is initially unaffected, significant growth could lead to future action from the administration.
Rooftop Solar in Mexico eliminates approximately 1.3M tonnes of CO2 annually according to SENER[5] and has the capacity to increase given strong customer demand and a well-established industry. This too is threatened by this Energy Reform.
Mexican Legislative Outlook
It is hard to understate how drastic the new energy reform proposes are and how many projects, companies, and individuals the reforms would negatively impact. While on its face, the legislation lacks the two-thirds majority support it needs to pass, AMLO has increased pressure on the Partido Revolucionario Institucional (PRI) party, the party that first nationalized the oil and gas industry, in an attempt to garner enough votes.[6] According to people close to Mexican political leaders, there is an increasing sense and concern that some version of the new reform will likely pass.
What This Means
We expect a vote will happen before December. If any version of the reform passes, it seems realistic to expect that:
These actions violate the USMCA and will likely lead to reprisals not only from private firms, but from the US and Canadian governments as well.[7]
This move would put at least $45 Billion USD of projects in jeopardy and may be considered expropriation of these projects under international law.[8]
Mexico has set targets of reducing green-house gas emissions by 36% by 2030 through the Paris Climate Agreement. This energy reform likely eliminates any realistic scenario of achieving this given Administration prioritization to date.
For corporations, the dirtier and more expensive power comes with a third strike-it comes in clear contravention to their COP26 Goals.
This is projected to be devastating for the Mexican economy as seen in a study conducted by the Consejo Coordinador Empresarial, the renewable energy industry has the potential to increase the Mexican GDP by $748 million USD by 2024, generate nearly 288,000 direct, long-lasting jobs, mitigate 55 Mt of CO2 equivalents, and generate massive savings for Mexican businesses and consumers.[10]
Moving Forward
If passed, the new energy reform proposal will negatively impact Mexico, international climate, clean energy, trade, and corporate interests for the US and US actors as well. The reforms will likely trigger many renewable energy firms to exit the Mexican power market and would hamper the ability for corporations and investors to meet clean energy and sustainability goals in Mexico. Renewable energy is a global growth engine that can fuel economic and community recovery and growth.
