Solar Thermal Gains Ground in Mexico’s Energy Transition

From the rooftops of suburban homes to the steam-driven processes of sprawling industrial complexes, a quieter form of renewable energy is taking root in Mexico. Unlike photovoltaic systems that convert sunlight into electricity, solar thermal technologies focus on capturing the sun’s heat to heat water or air, providing a high-efficiency, low-emission alternative to fossil fuels for both households and factories.

While it may not make as many headlines as solar PV or wind, solar thermal is already playing a critical role in the country’s energy transition. And in the face of rising fuel costs, urban pollution, and mounting regulatory pressure, its promise is just beginning to heat up. “There are many challenges, but also many opportunities,” said Daniel García Valladares, CEO of Mexican company Modulo Solar. “This is a technology that has been adopted across different sectors in interesting ways.”

Today, roughly 10% of Mexican homes, around 3.5 million households, have solar water heaters installed, according to García. While still a minority, the number reflects a steady transformation of the built environment, particularly in states with abundant sunlight and rising gas costs. “You look up at rooftops now and often see solar heaters. That speaks to a huge opportunity,” García said.

But residential uptake is only part of the picture, given Mexico’s leadership in large-scale solar thermal installations for industrial use. According to García, the country boasts more than 200 sizable systems installed across the pharmaceutical, food and beverage, and automotive sectors, making it a global leader in the deployment of solar heat for industrial processes.

In industrial settings, thermal energy often dominates. Of all the energy used in manufacturing globally, about 74% is thermal, used for pasteurization, drying, distillation, and steam generation. Yet, more than 90% of this thermal load is still powered by fossil fuels.

“In homes, the motivation is simple: saving money,” García explained. “In industry, the challenges are more technical. Companies want to know every day, every hour, exactly how much heat is being delivered, how much energy is being saved. They want automation and redundancy. But if you get it right, the potential is enormous.”

That industrial potential is already being realized in Mexico’s mining sector, where solar thermal systems can deliver rapid payback periods thanks to high fuel prices and limited access to gas infrastructure.

“When you build a mine, you do not get to choose its location,” said Flemming Jørgensen, director of Flemming Jorgensen, a solar thermal engineering firm based in Mexico. “Many mines do not have cheap energy sources nearby, which makes solar thermal much more attractive.”

Flemming Jorgensen recently completed a solar thermal system for the La Caridad mine, sourcing high-efficiency collectors from Finnish firm Savosolar while handling the local integration, including control systems, thermal storage, and automated monitoring. In 2024, the project cut Grupo México’s diesel use at the plant to 89,400L, a reduction of more than 84%. This translated into over 1,350t CO₂e in avoided emissions and an annual cost saving of roughly MX$9.5 million. But Jørgensen notes that even the most compelling technology faces barriers, especially in the form of inertia.

“The problem with humanity is that people tend to just follow what others do,” he said. “That slows down the green transition, which is a shame, because we do not need all this pollution. I can look out the window and see smoke that could have been avoided.” Despite that, Jørgensen believes profitability will ultimately drive adoption. “No one pays extra just to emit more, and with current technology, many green solutions are already the cheapest option.”

The solar thermal sector in Mexico faces structural challenges, including a lack of long-term thinking in purchasing decisions and minimal regulatory incentives outside major urban centers. “People only look at the cost of the equipment, not the cost of operating it,” said García. “There’s a big educational challenge in getting people to understand the true cost of technologies.”

Mexico City offers a notable exception, as building regulations require new homes and commercial buildings to install solar heaters capable of meeting at least 35–70% of their hot water demand. The goal is to reduce emissions from the city’s estimated 2.5 million gas heaters, many of which are poorly maintained and contribute to urban air pollution. “In many parts of the world, Europe, Asia, the Americas, there are mandatory standards. That is the direction we need to go,” García said.

Internationally, solar thermal technology faces a mixed outlook. According to data from 2023, global heat demand continues to rise, up 7% between 2017 and 2023. However, because only half of this new demand is being met by renewable heat sources, CO₂ emissions from heating also rose, particularly in the industrial sector.

Solar thermal additions declined globally by 7% in 2023, driven largely by a slowdown in China’s real estate market, which has historically underpinned the bulk of small-scale installations. Yet growth persisted elsewhere, including in Mexico (+5%), India (+27%), Brazil (+3%), and the United Kingdom (+66%).

Still, the long-term prospects remain promising. Solar heat for industrial processes (SHIP) added 94MWth in global capacity last year, 77MWth of which came from Europe alone. The sector is expected to grow fourfold by 2030, driven by demand in the food, beverage, textile, mining, and metal refining industries. One megaproject, a 1.5GWth SHIP plant in Saudi Arabia, is set to become the world’s largest upon completion in 2026.

In buildings, solar thermal consumption is projected to grow 40% globally by 2030, with rapid uptake expected in the Middle East, China, and the EU. There is also increasing interest in scaling up installations for commercial and public buildings, as small-scale systems face new competition, not just from gas and electric boilers, but from solar PV coupled with heat pumps.

Another innovation in the sector comes from the integration of heat storage, particularly through concentrating solar thermal power (CSP). Unlike traditional solar thermal setups, CSP systems use mirrors to focus sunlight into a central receiver that drives a steam turbine for electricity generation. Crucially, CSP systems can store heat in molten salts, allowing for round-the-clock power generation even after the sun sets.

While CSP remains a small segment globally, its hybrid electricity and thermal capabilities make it attractive for regions with high solar radiation and industrial power needs, another area where Mexico could eventually play a role.

Despite limited media attention and a slower adoption curve compared to solar PV, solar thermal is carving out an essential niche in Mexico’s energy landscape, one roof, one factory, and one mine at a time. “This technology has been around for decades,” García said. “But the real boom is happening now because people want to save money, and they want to be more sustainable. That combination is powerful.”