Batteries, Solar Could Power Mexico’s Clean Energy Future: Ember

Mexico’s vast solar resources position the country to transform its electricity system, displace reliance on imported US gas, and strengthen national energy security. But according to a new report from energy think tank Ember, fully unlocking this potential will depend on rapidly scaling battery storage while narrowing the gap between Mexico’s high installation costs and global benchmarks.

“High costs are ultimately the result of Mexico slowing down the renewable sector, especially solar,” said Wilmar Suárez, Latin America Energy Analyst, Ember and the report’s author. “As long as government targets and regulatory frameworks are unclear, investment will be lower, the market less attractive, and reaching significant renewable generation levels will be increasingly difficult.”

The report highlights that Mexico ranks among the world’s strongest solar locations. Hourly simulations using nearly two decades of radiation data show the country could meet 90% of its total power generation with 190GW of solar and 600GWh of batteries, relying on less than 0.2–0.3% of its land area. 

At the industrial level, a system with 600MW of solar and 1,700MWh of batteries could provide uninterrupted electricity for a 100MW factory or data center for over 300 days a year. Should shortfalls occur, they would still enable around 20 hours of daily supply. Mexico City ranked third globally in performance across a sample of 12 cities. “Mexico’s solar radiation is a wealth that covers nearly the entire territory,” Suárez said. “The choice is between using these domestic resources to become self-sufficient or continuing to rely on US gas imports with all the risks that brings.”

The opportunity is not just technical but economic. In 2024, more than half of Mexico’s power was generated with US gas. Ember estimates that scaling solar to 47GW by 2030, adding 36GW in just six years, could cut gas imports by 20%, saving US$1.6 billion annually. Each gigawatt of solar installed displaces enough imports to save about US$74 million per year. Coupled with 10GW of wind and additional hydropower, this expansion would raise clean power’s share to 45% of generation, meeting rising electricity demand while reducing import dependency.

Costs Hold Mexico Back

Despite this potential, solar deployment has slowed down. In 2018, Mexico was ahead of Brazil in per capita solar installations. By 2024, Mexico added only 8W per person, while Brazil installed 72W and Chile 109W. “The differences with other countries in the region are enormous,” Suárez said. “If Mexico built solar at Chile’s pace, it could add 15GW per year and meet the 45% clean electricity goal by 2030 in just two years.”

More ambitious growth could turn Mexico into what Ember calls a “solar superpower.” By deploying 165GW of solar and 500GWh of storage by 2030, the country could displace all US gas from its power sector. “Without clear policy targets and timely permits, Mexico loses scale, supply chains shift elsewhere, and both system and labor costs rise,” Suárez explained.

But a cost challenge looms large. Ember found that building 36GW of solar and 30GWh of storage in Mexico could cost nearly US$45 billion, about 50% more than the global average. The US$15 billion premium is linked to higher balance-of-system expenses, such as cabling and mounting, as well as elevated permitting and design costs. IRENA data shows Mexico’s solar installation costs averaged US$1,050/kW in 2023, compared to a global average of US$758/kW. Battery costs are even further from international benchmarks, at an implied US$350/kWh versus a global average of US$165/kWh.

These higher costs are partly the result of slow deployment. In 2018, Mexico was installing more solar per capita than Brazil. Six years later, Brazil’s per capita deployment has increased twelvefold, while Mexico’s has fallen. Brazil and Chile are now enjoying the benefits of scale, local expertise, and competitive tendering, which drive costs down. Mexico has yet to capture those efficiencies.

CFE’s current investment plan calls for just 4.7GW of new utility-scale solar by 2030, less than one-seventh of what Ember says is needed under the 45% clean electricity scenario. Without accelerated deployment and procurement reforms, Mexico risks missing out on economies of scale and the broader economic benefits of cheaper solar and storage.

Batteries: Game Changers 

Battery innovation is changing the outlook quickly. In 2024, average global battery costs dropped 40% to US$165/kWh, and even lower figures are being reported in countries like China and Saudi Arabia. These declines are particularly significant for sunny countries like Mexico, where storage unlocks greater grid efficiency by spreading solar output across the day and reducing curtailment. Ember notes that if new solar plants are paired with batteries equal to 30% of capacity with three-hour discharge, excess solar output falls from 3.5% to less than 0.7%.

“Batteries should not only store excess solar but also provide flexibility and stability to the grid,” he said. “They can help manage frequency, balance peaks, and ensure reliability at night when demand rises and solar is not available.”

Ember estimates that under the solar superpower scenario, photovoltaic generation could supply 58% of Mexico’s electricity, while gas would fall to just 3%. To achieve this, Mexico will need major transmission upgrades alongside clearer policy direction. Ember’s analysis assumes no congestion, but Suárez cautioned that today’s grid is not ready. “Mexico must strengthen its transmission capacity so that renewable energy can be injected into the grid without curtailment,” he said.

He stressed that clear and consistent energy policy will be crucial for unlocking investment. “Targets in Mexico have tended to change, with some official and others more aspirational. From the investor’s perspective, that creates uncertainty, and they may choose to put money elsewhere,” Suárez said.

Outlook

The report concludes that Mexico’s abundant sunshine could support solar as the “backbone” of its grid. The technical feasibility is clear: uninterrupted supply is possible more than 95% of the time across most regions, even in cloudier years. The economic case is also strong, with billions in avoided gas imports at stake. The challenge lies in execution, scaling fast enough to catch up with regional peers, building out storage to maximize efficiency, and cutting costs to global levels.

“Rapidly scaling solar could reduce or even eliminate reliance on imported US gas for power generation, strengthening national energy security,” Ember notes. “Unlocking this potential requires Mexico to leverage rapid advances in battery technologies while closing the gap between its solar installation costs and the global average.”

If Mexico succeeds, it would not only transform its energy mix but also redefine its role in North America’s energy landscape, moving from heavy import dependency toward a model of self-reliance powered by the sun. Yet solar is only part of the picture. Wind energy, long recognized as another of Mexico’s natural strengths, has the potential to reinforce this transition.

“I believe Mexico has a unique opportunity to help other countries in the energy transition because it has excellent wind resources in both the north and south, allowing to combine wind and solar,” said Eduardo Ricotta, Latin America President, Vestas. “Not every country has that, especially in the Northern Hemisphere. Mexico’s geographic location enables this advantage, making it a standout player in renewables.” 

Ricotta stressed that the complementary nature of these technologies is crucial: wind typically ramps up later in the day, balancing solar’s midday peak, and often performs better during dry conditions when hydro output is limited. “This combination positions Mexico to lead with a robust and balanced renewable energy mix, an opportunity for all of us to support and accelerate,” he said.