Potential to Powerhouse: Accelerating Solar Deployment in Mexico

As Mexico moves toward 2030, the country’s energy agenda is reaching a defining crossroads. The federal government has launched an ambitious roadmap to accelerate renewable generation, expand grid capacity, and strengthen the role of domestic industry under the global nearshoring wave. Yet the pace and shape of Mexico’s solar transition will depend on how effectively the public and private sectors align strategy, regulation, and investment over the next decade, agreed experts at Mexico Business Summit 2025.

“Having available energy is no longer enough; now that energy must be renewable,” says Ian de la Garza, CEO of Finsolar. “Many businesses are interested in investing in Mexico, and see great potential in renewable projects.”

The Ministry of Energy’s new mechanism for prioritizing generation permits signals a shift in the way Mexico plans and approves clean energy projects. The ministry’s call for private sector collaboration, issued in October, outlines the development of 34 renewable plants totaling more than 6GW, about two-thirds solar and one-third wind, representing investments of roughly US$7.1 billion. The process aims to streamline project evaluation, group developments by region, and reinforce critical transmission infrastructure. The initiative is part of a broader effort to meet Mexico’s 2030 goal of sourcing at least 38% of its electricity from renewables, while maintaining state utility CFE’s majority role in the national grid.

Policymakers have framed the plan as a turning point for coordination between government and industry, with faster permitting, defined evaluation timelines, and a focus on transparency. But achieving scale will also require long-term resilience, reducing exposure to global supply chain shocks, stabilizing input costs, and ensuring that energy infrastructure keeps pace with industrial demand. The nearshoring boom has amplified Mexico’s need for reliable, competitively priced electricity, especially in manufacturing corridors across the north and center of the country.

While the policy framework has become more centralized, Mexico’s solar market remains dynamic. The country added 1.6GW of new photovoltaic capacity in 2024, pushing total installed capacity to 12.6GW. Most of this growth came from small and medium-scale rooftop systems, reflecting growing confidence among businesses and consumers. Distributed generation surpassed 1GW in new annual additions for the first time, driven by falling costs, corporate sustainability targets, and electricity price volatility.

Since 2017, distributed PV has grown at an average annual rate of nearly 40%, and projections suggest it could reach 8GW by 2030 if current momentum holds. However, the utility-scale segment has expanded more slowly. Developers face grid congestion and planning restrictions that limit flexibility under CFE’s 54% generation share mandate. While recent reforms provide legal certainty on paper, investors remain cautious about how centralized oversight might affect project timelines and access to transmission capacity.

“Mexico was once one of the largest markets for energy renewables. Nine years ago the country had everything. Now, to reach its 2030 objectives, it has to return to the basics,” said Alberto Cuter, Vice President of Latam and Italy, Jinko Solar. He noted that enabling industries to generate more of their own energy will be key to progress. “By allowing manufacturing plants to increase the amount of energy they can produce, businesses will save money while easing up pressure on the grid.”

At the same time, Mexico’s solar potential continues to attract attention from analysts and technology developers worldwide. Mexico ranks among the world’s most promising solar regions. With sufficient battery storage, solar could supply up to 90% of national electricity needs while occupying less than 0.3% of the country’s land area. Expanding renewable generation could reduce dependency on imported US natural gas, which currently fuels more than half of Mexico’s power generation.

Scaling solar capacity to 47GW by 2030 could cut gas imports by 20%, saving around US$1.6 billion per year, according to Ember’s analysis. The broader economic implications go beyond cost savings: a more self-sufficient power system would enhance Mexico’s energy security, strengthen its industrial competitiveness, and align with the administration’s climate targets.

“Mexico has significant potential for renewable energies. To achieve it, the sector needs a stable regulatory and legal environment, so companies can invest in long-term projects,” says Luis Quero, Mexico Country Manager, Atlantica.

Tapping that potential will also require urgent progress in grid modernization. Transmission remains one of the country’s biggest bottlenecks. Many renewable projects are located in resource-rich but remote areas with limited interconnection capacity. Building new transmission lines has proven slow, weighed down by environmental permitting and coordination hurdles.

“Storage will play a key role in making the grid more reliable and in achieving the country’s energy goals. The combination of storage and solar projects will create attractive projects that will boost Mexico’s economy,” said Juan Pablo Sáenz, Mexico Country Manager, Atlas Renewable Energy. “The grid has not received significant investments in recent years, and new projects will arrive slowly. For that reason, it is necessary to invest in storage projects.”

Distributed and self-consumption models are emerging as practical solutions to grid woes, particularly for industrial users seeking to stabilize energy costs and hedge against grid constraints. Combining on-site solar generation with battery storage is becoming increasingly viable as technology costs fall. “A large part of a company’s energy bill corresponds to consumption during peak hours. By using batteries during those hours, clients can save money, while taking pressure off the grid,” said Quero. These hybrid models can also help manage peak demand, enhance reliability, and reduce strain on the national grid.

Authorities have begun to recognize the potential of self-consumption systems paired with storage as part of Mexico’s broader energy transition. “Storage will help Mexico to avoid blackouts and guarantee the energy the country needs,” said Miguel Medina, Managing Director, Corey Solar. 

While regulatory clarity remains a work in progress, there are signs of gradual alignment between policy and market practice. Still, the challenge lies in implementation. Laws and targets can guide the direction of travel, but real progress depends on execution and on whether administrative processes, financing frameworks, and technical standards evolve quickly enough to match the market’s pace. “The final goal should be to guarantee the provision of inexpensive, renewable energy to the final user,” said Medina.