Mexico Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in mexico, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Renewable Energy
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Overview

Mexico has enormous potential to develop renewable energy projects. The country has high solar radiation, wind capacity, and geothermal sources. In addition, with the right technologies and expertise, the country could increase energy storage and green hydrogen projects. Harnessing this potential could help to diversify the energy supply, lower the cost of electricity, and support companies that have strict sustainability objectives and are committed to lowering their carbon footprint. 

Mexico’s National Power System Development Program (Programa de Desarrollo del Sistema Eléctrico Nacional or PRODESEN) reported a total of 351,695 GWh in 2023, from which 24.32 percent corresponded to clean energy sources, (renewable such as solar, wind, and hydro, and non-renewable such as nuclear and efficient cogeneration), and 75 percent corresponded to fossil fuels (combined cycle, conventional thermal, coal fired, gas fired, and internal combustion). The installed capacity of renewable energy mainly came from hydro, wind, and photovoltaic solar PV plants. This installed capacity from clean energy plants is projected to increase to 62.4 percent by 2038. Additionally, the 2024-2038 PRODESEN addresses power generation, transmission, distribution, and commercialization needs of the National Electrical System (Sistema Eléctrico Nacional or SEN). PRODESEN also includes a section that provides an overview of electric mobility and transportation and projects a scenario for 2038, estimating that light-duty electric vehicles, cargo vehicles, and buses will reach approximately 6.4 million electric vehicles, which would represent 35.1 percent of the motor vehicles sold in 2038.

Key drivers are the new rules of the electricity market after the energy reform. On March 18, 2025, President Claudia Sheinbaum enacted a sweeping energy reform package that restructures Mexico’s power sector in favor of state-owned companies. The package includes eight new secondary laws and amendments to three existing laws, implementing the framework laid out in Sheinbaum’s October 2024 constitutional reform. These changes largely reverse the liberalization introduced in Mexico’s 2014 energy reform, significantly restricting private sector participation. Under the new laws, at least 54 percent of the electricity dispatched to the national grid must come from Federal Electricity Commission (CFE) plants, leaving up to 46 percent for private sector producers. 

Despite the increasingly state-dominant landscape, opportunities remain for U.S. companies that align with Mexico’s clean energy and grid modernization priorities. Mexico’s push to expand renewable energy continues to create demand for solar, wind, geothermal, and energy storage technologies, along with smart grid and industrial efficiency solutions. 

The new laws define six pathways for private sector participation in electricity generation:

1.    On-site distributed generation up to 0.7 MW, exempt from permit requirements 
2.    Self-generation systems between 0.7-20 MW, not connected to the national grid 
3.    Self-generation systems between 0.7-20 MW with grid connection, where surplus power must be sold exclusively to the CFE 
4.    Open competition for projects larger than 0.7 MW participating in Mexico’s wholesale electricity market 
5.    Utility-scale projects developed privately, with electricity sold exclusively to the CFE and possible asset transfer 
6.    Joint ventures with the CFE, in which the CFE holds a minimum 54 percent ownership stake

Leading Sub-sectors

  • Small-scale distributed generation
  • On-site distributed generation
  • Energy storage
  • Solar heating
  • Geothermal

Opportunities

Industrial and Commercial Sectors

Companies are continuously looking for technological alternatives on-site to increase energy efficiency and reduce costs. In Mexico, more than 30 percent of the industrial sector has begun to take voluntary steps to decarbonize and become more efficient with their operations and processes. This process produces economic benefits for companies and represents a commitment of the private sector to contribute to their corporate sustainable development objectives.

Working with States

Some States in Mexico have stated the importance of developing and supporting renewable energy projects as part of the energy matrix. Securing a reliable electricity supply is a priority in most States to attract more investments that will support economic growth and sustainable development. Some states have presented ambitious plans for economic growth that include and consider the need to invest in electricity infrastructure in the near future. 

Strengthening and Expansion of the National Electrical System 2025-2030

On February 5, President Claudia Sheinbaum announced the Plan to Strengthen and Expand the National Electrical System 2025-2038. The objective is that CFE generates 22,674 MW with an estimated investment of over 22 billion dollars, while private investment generates 6,400 MW. This plan contemplates seven wind farms, nine photovoltaic plants, five combined-cycle plants that run on natural gas, including the replacement of the Tula fuel oil plant with a combined-cycle plant; internal combustion plants; batteries that accompany renewable energy; and cogeneration. The plan also projects that Pemex will generate electricity primarily in its refineries and petrochemical plants.

Geothermal

On March 18, 2025, Mexico published a new Geothermal Energy Law to establish a regulatory framework exploration and exploitation of geothermal resources for its sustainable use of the underground thermal energy withing the limits of the national territory with the objective of generating electricity or for divers uses such as water hear, industrial or agricultural uses. 

Solar Thermal

On August 26, 2025, President Claudia Sheinbaum announced two thermal solar projects in Baja California. These projects contemplate concentrated solar thermal power plant technology with a central tower. As part of the commitments of energy transition and Plan Mexico 2025-2030, CFE will promote the installation of these two thermal solar projects to diversify the energy matrix of clean energy. It will be installed in the Baja California Peninsula because of the high demand for tourism and urban growth, the reliability and clean energy needed, and because this area has high solar radiation. 

Resources

  • Secretariat of Energy (SENER)
  • Federal Electricity Commission (CFE)
  • National Energy Commission (CNE)
  • National Energy Control Center (CENACE)
  • National Institute for Electricity and Clean Energy (INEEL)
  • Fund for Energy Saving (FIDE)
  • Mexican Association for Wind Energy (AMDEE)
  • National Association for Solar Energy (ANES)
  • Mexican Solar Photovoltaic Association (ASOLMEX)
  • Mexican Geothermal Association (AGM)
  • Mexican Hydrogen Association
  • Mexican Hydro Power Association (AMEXHIDRO)
  • National Commission for the Efficient Use of Energy (CONUEE)

Events

  • The Green Expo: 2026 TBC. Mexico City.
  • RE+: November 16-19, 2026. Las Vegas.
  • Distributech International: February 2-5, 2026. San Diego, CA.
  • Expo Eléctrica Internacional: May 26-28, 2026. Mexico City.

Commercial Specialist

For further information and assistance in exploring opportunities in Mexico’s renewable energy sector, contact: Claudia Salgado (Claudia.Salgado@trade.gov)

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