Mexico’s Solar Growth Strong; Policy, Grid Gaps Loom

Mexico’s solar sector continues to grow, but regulatory uncertainty and limited transmission capacity risk slowing its momentum. According to a new report by SolarPower Europe, in collaboration with the Global Solar Council and Mexico’s solar association ASOLMEX, distributed generation is driving most of the country’s recent solar growth, while utility-scale projects struggle with bottlenecks tied to grid access and shifting policy priorities.

Mexico installed 1.6GW of new solar PV capacity in 2024, pushing total installed capacity to 12.6GW. Rooftop and small-scale solar accounted for the bulk of this increase, with distributed generation surpassing 1GW in new additions for the first time. Nearly 99% of these systems operate under net-metering, with the majority being installations under 50kW, reflecting growing demand among households and businesses seeking to reduce electricity costs. Between 2017 and 2024, distributed PV grew at an average annual rate of 39%, and analysts project capacity could reach 8GW by 2030 if growth rates continue.

Utility-scale development has been slower to advance, held back by grid congestion and policy reforms that centralise planning under the state utility CFE. Recent legislation requires CFE to maintain a minimum 54% share of power injected into the grid, while new renewable projects must align with government-set planning criteria. The report warns that while the reforms offer legal certainty on paper, they lack clear mechanisms to help investors manage the risks of a centralised and less flexible planning approach.

“Although the new legislation stresses that new projects must align with the mandatory planning conducted by SENER, the criteria for developing these programmes remains uncertain, as do the short-term mechanisms required to adjust the baseline scenario in response to unforeseen circumstances beyond the scope of the planning,” reads the report. 

Mexico’s clean energy trajectory highlights both the opportunities and the challenges ahead according to the study. In 2024, solar PV supplied 5.3% of national electricity, or 18.6TWh, with wind contributing 5.7% and hydro 6.8%. Combined, low-carbon sources made up 22.8% of generation, far below the global average of 41%. Fossil fuels continue to dominate the power mix with a 77.2% share, a figure unchanged from 2023. Although Mexico has pledged to generate 50% of its electricity from clean sources by 2050, the lack of interim benchmarks creates uncertainty about how the country will track its progress.

To accelerate solar deployment and align with emissions goals, SolarPower Europe lays out several recommendations. At the top of the list is regulatory certainty. The group notes that while Mexico has passed new secondary laws for distributed generation, self-supply, and the wholesale market, many details remain undefined. Developers face uncertainty over how planning scenarios will adapt to unforeseen changes, such as fluctuations in demand or delays in transmission projects.

Expanding and modernising the transmission grid is another urgent priority. The report points out that transmission growth has lagged far behind rising electricity demand over the past decade, constraining the integration of new solar capacity. The expansion plan currently includes 73 projects across 25 states, but SolarPower Europe argues that more ambitious efforts are needed. One option is to group interconnection requirements for new projects, which could streamline technical studies and lower both costs and delays.

Another key recommendation is to restore clarity on clean energy targets. Mexico’s previous Energy Transition Act established milestones of 25% clean power by 2018, 30% by 2021, and 35% by 2024, supported by CELs. These targets were never updated, leaving the country without a clear benchmark for 2030. SolarPower Europe stresses that without measurable goals, it will be difficult to evaluate Mexico’s progress or ensure alignment with its 2050 decarbonisation commitments.

Transparency also emerges as a critical gap. The report highlights that public access to operational data from the grid operator has declined in recent years, limiting the ability of investors and researchers to analyse system performance and anticipate potential risks. Greater transparency, it argues, would strengthen planning processes and help non-governmental stakeholders provide independent input to the Ministry of Energy.

“Transparency mechanisms should be reinforced,” reads the report. “In recent years, the availability of publicly accessible information on the operational conditions of the electricity system has significantly declined. This lack of transparency undermines private investors’ ability to understand daily system operations, and the criteria used by the Independent System Operator to respond to extraordinary events. It also limits the capacity of non-governmental organizations to conduct independent analyses that could support the centralized planning efforts led by the Ministry of Energy.”

Finally, SolarPower Europe urges Mexico to adopt a territorial planning framework that integrates the social dimension into renewable deployment. Current processes focus largely on technical and financial viability, often leaving community engagement as an afterthought. A more participatory approach could include zoning, exclusion areas, and priority regions, alongside mechanisms to involve local communities in project design and approval.

Mexico has some of the world’s strongest solar resources, particularly in the northern and central high-desert regions, where irradiation levels reach 5.4kWh/kWp per day. With distributed generation booming and new rules opening space for self-supply and market-based projects, the country remains an attractive destination for solar investment. Yet without stronger transmission infrastructure, clearer policy signals, and more inclusive planning, SolarPower Europe warns that Mexico risks falling short of its clean energy ambitions.