Following more than 6 GW of ‘firm capacity’ additions between January 2019 and June 2020 and an unprecedented drop in loads due to coronavirus lockdown measures, Mexico’s Capacity Market closed at 0.32x in 2020 – a significant drop from 1.51x in 2019. Such market fundamentals led local marginal prices to remain low throughout the year, decreasing energy market revenues for gas turbines. CENACE compensates such ‘losses’ through the final capacity market price. Thus, as the ‘closing price’ declined sharply, very low energy margins resulted in a substantial increase in final ‘net price.' However, solar generation, which has grown continuously to reach 4.4% of total annual in 2020, has continued to shift critical hours – those with lower operating reserves – to after-sunset, decreasing the benefits captured from this market by this technology. This Insight analyzes Mexico’s Capacity Market drivers and results as well as the implications of increasing solar penetration on its dynamics.