In an industrial facility within one of Mexico's key manufacturing hubs, automated assembly lines move with efficiency, robotic arms perform tasks, and computer numerical control (CNC) machines are active. Suddenly, the lights flicker and die. The sound of production is replaced by a costly silence. This is not a hypothetical scenario. It is a frequent reality for a growing number of businesses across Mexico.

An Unstable Grid and the Risks for Industrial Parks

Frequent blackouts (apagones) and power quality issues have evolved from an occasional nuisance into a significant, systemic threat to industrial competitiveness and the nation's nearshoring ambitions. The new reality of risk is clear. 91% of Mexico's industrial parks experienced power supply failures. These are not isolated, weather-related anomalies but symptoms of a structural issue. Multi-state blackouts have become an annual occurrence, affecting millions of users and impacting industry. These events are now a predictable feature of the business landscape, necessitating a proactive and strategic response.

The normalization of this issue can be a challenge for industrial decision-makers. Reports from business leaders in regions like Mexicali and San Luis Potosí describe the blackouts as a recurring problem, fostering a sense of resignation. This can lead businesses to treat energy instability as a cost of doing business rather than a key vulnerability. 

Why the Lights Go Out

The recurring power outages in Mexico's industrial zones are the consequence of systemic issues. The grid's instability stems from a core problem, which is then exacerbated by a combination of operational pressures and compounded by policy challenges.

Core Problem: Underinvestment Creates a Widening Deficit

The fundamental issue is a prolonged underinvestment in the Red Nacional de Transmisión (National Transmission Network). The grid's infrastructure is outdated, designed to meet the electricity demand of 2018, not the increased needs of today's nearshoring-driven economy.

The data provides clear evidence of this deficit. According to an analysis by the Mexican Institute for Competitiveness (IMCO), while national electricity demand grew by 3.4% in 2022 and 3.5% in 2023, the transmission network expanded by a low 0.09% and 0.10% in those same years, respectively. 

For 2023, the actual investment exercised by CFE was only 21% of what its own planning mechanism, the Programa de Desarrollo del Sistema Eléctrico Nacional (PRODESEN), deemed necessary to maintain and expand the grid. This underinvestment has created a system that is unable to meet the country's growing energy needs.

A Combination of Catalysts

This underinvestment has left the grid vulnerable to a combination of pressures that now trigger system-wide emergencies.

• Demand Surges and Dwindling Reserves: Heatwaves are driving record electricity demand for air conditioning and industrial cooling. This surge in consumption pushes the grid's operational reserve margin—the buffer of available generation capacity over current demand—below the 6% threshold required for stable operation. In May 2024, the reserve margin fell to just 3%. When this happens, the Centro Nacional de Control de Energía (CENACE) declares a "Estado Operativo de Emergencia" and implements rolling blackouts to shed load and prevent a nationwide collapse of the system.

• Simultaneous Generation Failures: The issue is not just one of demand, but also supply. As demand peaks, the system is often affected by simultaneous failures on the generation side. Older thermal power plants, such as the combined-cycle facilities in Altamira and Villa de Reyes, go offline unexpectedly. At the same time, generation from renewable sources can be intermittent; solar output drops at night or on cloudy days, and wind generation ceases in calm conditions. This is exacerbated by a prolonged drought that has reduced Mexico's hydroelectric capacity. Nationally, hydroelectric plants have been operating at only 30% of their potential, with some facilities in non-Chiapas regions reaching as low as 17% capacity.

• Transmission Bottlenecks: Even when power is generated, the grid itself often cannot deliver it where it is needed. Key transmission corridors are saturated, lacking the capacity to transport electricity from generation-rich regions—like Sonora for solar power or Oaxaca for wind—to the industrial consumption centers in the north and central parts of the country. These bottlenecks create energy congestion, forcing CENACE to curtail generation and implement targeted interruptions to maintain grid stability.

Quantifying the Impact: The Cost of Downtime for Manufacturers

The financial impact of Mexico's unreliable power grid is not a minor operational expense, it is a substantial drain on the nation's productive sectors. The numbers are significant, but they only begin to tell the story of the secondary costs that follow every power disruption.

The National Cost

According to the Consejo Nacional de la Industria Maquiladora y Manufacturera de Exportación (Index), the estimated economic loss for the manufacturing sector amounts to US$ 200 million for every hour without electricity. This figure encompasses lost production, idled labor, and logistical disruptions nationwide. To put this in perspective, the blackouts in 2021 are estimated to have cost the Mexican economy between US$2.7 billion and US$3.0 billion.

Regional Impact

The economic impact is significant in Mexico's key industrial corridors. In May 2024, a series of blackouts led the industrial sector of Jalisco to report losses ranging from US$12 million to US$15 million (MXN 200 million to MXN 250 million). The electronics and food sectors were affected, with some food companies reporting losses of up to MX20 million (approximately US1.2 million) due to the power cuts.

Secondary Costs Beyond Lost Production

The cost of an outage extends beyond the immediate halt in production. A series of secondary financial damages affects an industrial operation.

• Equipment Damage: An unstable grid is characterized by frequent voltage fluctuations, sags, swells, and micro-cortes. These power quality issues cause cumulative damage to industrial equipment, including robotics, CNC machines, and programmable logic controllers (PLCs). Furthermore, the power surges that often occur when restarting machinery after an outage can damage electronic components, leading to repairs and extended downtime.

• Material and Product Loss: In many industries, a momentary power loss can lead to the loss of an entire production batch. In the plastics and glass sectors, for instance, maintaining precise temperatures is critical. An outage can cause molten materials to solidify improperly, forcing a restart of the process and the scrapping of raw materials. Similarly, in the food and beverage industry, maintaining the cold chain is important. Power loss can lead to spoilage and force companies to incur fuel costs to run backup diesel generators. One paper producer in San Luis Potosí reported losing 500 tons of product due to energy-related disruptions.

• Operational Inefficiencies: Every unplanned shutdown requires production lines to be reset, a process that can take hours. This leads to operational waste and often necessitates overtime labor to meet production quotas, reducing profit margins.

• Supply Chain Disruption and Reputational Damage: In the world of nearshoring and just-in-time manufacturing, reliability is key. Failing to meet delivery deadlines due to power outages results not only in contractual penalties but also in a loss of trust with international clients. This threatens Mexico's attractiveness for foreign direct investment (FDI) and undermines the foundation of its nearshoring opportunity.

The Human Impact

Beyond the balance sheet, an unstable power supply has a human cost. Operating in manufacturing facilities where temperatures can exceed 45°C (113°F) without adequate air conditioning or ventilation systems poses a significant health and safety risk to workers.

The following table consolidates the financial data, providing a summary of the economic impact posed by an unstable grid:

The Onsite Solution Part 1: Harnessing the Sun with Industrial Solar PV

Faced with a volatile and unreliable national grid, industrial leaders must shift their perspective on energy. Onsite solar generation is no longer just an environmental, social, and governance (ESG) consideration, it is a core business strategy for cost reduction, risk mitigation, and operational stability. Given that 85% of Mexico's territory possesses optimal solar irradiance, the country is positioned to leverage this resource for industrial advantage. As grid electricity costs continue their upward trend, driven by national fuel supply issues and grid inefficiencies, onsite solar offers a pathway to predictable, low-cost energy.

The Financial Case for Solar

The business case for adopting industrial-scale solar photovoltaic (PV) systems in Mexico is strong, supported by three key financial pillars: rapid returns, significant cost savings, and accessible financing models.

• Rapid Return on Investment (ROI): For industrial facilities with high electricity consumption, the payback period for a solar PV system can be short. Companies often see a full return on their initial investment in as little as 2 to 4 years. This rapid amortization makes solar a compelling financial proposition.

• Significant Cost Reduction: By generating electricity directly at the point of consumption, onsite solar systems can reduce a facility's energy spending by 20% to 40%. This is achieved by directly offsetting the amount of high-cost electricity purchased from the CFE grid. The savings are not only substantial but also predictable, insulating the business from the CFE's tariff adjustments for the 25-plus-year lifespan of the solar asset.

• No-CapEx Models (Power Purchase Agreements): A primary barrier to solar adoption for many companies—upfront capital expenditure—can be eliminated through a Power Purchase Agreement (PPA). Under this model, an energy partner installs, owns, and operates the solar system on the client's property at no cost to the client. The industrial facility then simply purchases the electricity generated by the system at a pre-negotiated, fixed rate that is lower than the CFE tariff. This structure delivers immediate savings from the very first day.

• Tax Incentives: A Presidential Decree, in effect from January 2025 through September 2030, provides an accelerated depreciation incentive for investments in new fixed assets, including renewable energy equipment. This allows companies to deduct a large portion of the asset's cost in a single year, with depreciation rates ranging from 35% to 91%, depending on the asset type. This tax benefit improves the project's overall financial returns and shortens the payback period.

Navigating the Regulatory Path

While the regulatory environment for large-scale, utility-level energy projects in Mexico has been challenging, the pathway for onsite "distributed generation" (DG) is more streamlined and favorable for industrial consumers.

Under the new laws enacted in March 2025, solar systems with a capacity below 0.7 MW (700 kW) are classified as exempt generation and do not require a generation permit from the national energy commission. This exemption reduces project risk, cost, and development timelines, making it an attractive option for many small and medium-sized industrial facilities. For larger systems between 0.7 MW and 20 MW, the new laws establish clear pathways for self-generation, including provisions for selling any surplus power generated exclusively to the CFE.

Case Study Spotlight: Deacero's Solar Project

The strategic value of securing long-term, low-cost energy is illustrated by the actions of Deacero, one of Mexico's leading steel manufacturers. Recognizing the risks of grid dependency, Deacero signed a 20-year PPA to purchase the entire 110 MW output of a solar park in Sonora.

This US$115 million project now supplies 20% of Deacero's total energy requirements, demonstrating that solar power is sufficient to support heavy industrial operations. This agreement insulates a significant portion of Deacero's energy costs from grid volatility and CFE price hikes, providing the company with a long-term competitive advantage and a model for other industrial leaders to follow.

The Onsite Solution Part 2: Achieving Resilience with Battery Energy Storage (BESS)

While onsite solar provides a solution for reducing energy costs, it is an intermittent resource that generates power only when the sun is shining. To achieve operational resilience and greater independence from an unstable grid, a second layer of technology is required. Battery Energy Storage Systems (BESS) are the component that transforms an onsite solar installation into a resilient power source, offering a solution to the risks of blackouts and power quality issues.

The Dual Value of BESS

A BESS delivers value to an industrial facility in two distinct but important ways: ensuring operational continuity and enabling strategic cost reduction.

1. Uninterrupted Operations (Backup Power): An immediate benefit of a BESS is its ability to provide seamless backup power the moment a grid outage occurs. Unlike diesel generators, which have a startup lag, require fuel, and demand maintenance, a BESS provides clean and immediate power with no interruption to critical processes. This capability eliminates downtime, protects equipment from power surges associated with outages, and ensures production continuity.

2. Strategic Cost Reduction (Peak Shaving): Beyond backup power, a Battery Energy Storage System (BESS) is a financial tool for actively managing energy costs. The CFE's industrial tariffs (such as GDMTH, DIST, and DIT) include not only a charge for energy consumed (kWh) but also "capacity" or "demand charges" (kW) based on the single highest point of power consumption during peak hours, which typically occur between 6:00 PM and 10:00 PM. 

A BESS allows a facility to store low-cost energy—either from its solar array during the day or from the grid during off-peak "base" hours when tariffs are lowest—and then discharge that stored energy to power the facility during these expensive peak hours. This strategy, known as "peak shaving," reduces the peak demand that the CFE meter registers, reducing the most expensive component of the monthly electricity bill. This optimization can lead to overall savings of up to 35% and deliver a return on investment for the BESS in as little as 3 years.

The New Regulatory Framework (March 2025)

Recognizing the role of energy storage, the Mexican government has recently established a regulatory framework, providing a path forward for BESS deployment.

• Key Modalities for Industry: The regulations outline several modalities for integrating Battery Energy Storage Systems (BESS). The most relevant for industrial users is SAE-CC (storage associated with a load center). This refers to a BESS installed "behind-the-meter" for the facility's own use. This modality does not require a generation permit, which simplifies and accelerates the deployment process.

• Technical and Safety Requirements: The framework establishes clear technical requirements for interconnection with the grid. Systems must comply with international safety standards, such as UL 9540, to ensure safe operation. A typical industrial Battery Energy Storage System (BESS) consists of several key components: the batteries themselves (most commonly Lithium-ion), a power conversion system (PCS) or inverter, and an Energy Management System (EMS). The EMS serves as the control center of the system, utilizing software to manage charging and discharging cycles, thereby maximizing resilience and financial savings.

Case Study Spotlight: 3.72 MWh Liquid-Cooled BESS in Mexico

The deployment of BESS technology is already underway in Mexico, as demonstrated by a recent project involving a 3.72 MWh liquid-cooled BESS integrated with a high-voltage solar hybrid system for an industrial client.

This project is notable for its use of liquid cooling technology. Unlike traditional air-cooling, liquid cooling maintains the battery cells at their optimal operating temperature with higher efficiency. This is particularly important in Mexico's high-heat industrial environments, as it enhances the system's performance, extends its operational lifespan, and improves reliability. This case study highlights how BESS technology provides backup power, efficiency, cost savings, and a path toward energy independence and corporate sustainability goals.

The Integrated System: Why Solar + BESS is the Ultimate Strategy

While solar PV and Battery Energy Storage Systems (BESS) each offer standalone benefits, their power is unlocked when they are integrated into a single, cohesive system. The combination of onsite solar generation with battery storage creates a synergy, transforming a standard industrial facility into a resilient microgrid capable of operating with greater independence from the unstable national power supply.

Creating a Resilient Microgrid

The operational dynamic of an integrated Solar + BESS system is effective. During daylight hours, the solar PV array generates electricity at a low cost. This power is used to run the facility's daytime operations, with any excess energy directed to charge the battery energy storage system (BESS). When the sun sets or if the national grid fails, the BESS takes over, discharging its stored solar energy to power the facility through the night or for the duration of the blackout. This cycle maximizes the self-consumption of clean energy, minimizes reliance on the grid, and ensures operational continuity.

Future-Proofing for Nearshoring and ESG

In the context of Mexico's economic trajectory, this integrated energy solution is a prerequisite for competing in the modern global economy.

• Nearshoring Demands Reliability and Clean Energy: The influx of foreign direct investment driven by nearshoring is contingent on stable infrastructure. International companies relocating their supply chains to Mexico demand reliable, clean energy to operate their advanced manufacturing processes effectively and to meet their own corporate Environmental, Social, and Governance (ESG) commitments. A facility equipped with a Solar + BESS microgrid possesses a competitive advantage in attracting and retaining this investment.

• Aligning with National Policy Direction: The Mexican government's recent mandate, which requires 30% of battery storage capacity to be co-located with all new large-scale renewable energy projects, is a signal of the future. This policy acknowledges that energy storage is crucial for maintaining grid stability and facilitating the effective integration of renewable energy sources. Industrial leaders who adopt the Solar + BESS model now are aligning their operations with the direction of national energy policy.

Case Study Spotlight: Grupo Bimbo's Comprehensive Commitment

Grupo Bimbo, a global food company with deep roots in Mexico, exemplifies the strategic vision for energy leadership. The company has adopted a comprehensive approach to energy resilience and sustainability. In Mexico, Grupo Bimbo's operations are powered by clean energy from the 90 MW Piedra Larga Wind Farm. This is complemented by its "Bimbo Solar" initiative, a distributed generation program that has seen the installation of 3.7 MW of rooftop solar PV systems across dozens of its factories and distribution centers.

This strategy demonstrates a commitment to achieving 100% renewable energy use, which reduces operational risk from grid failures, provides predictable energy costs, and enhances the company's brand through a commitment to sustainability—a model for other industrial leaders.

The following table provides a comparative analysis of available energy strategies:

Take Control of Your Energy Future

The financial and operational consequences of this unreliability are significant, costing the manufacturing sector hundreds of millions of dollars per hour of downtime and jeopardizing Mexico's position as a destination for nearshoring investment. For industrial leaders, waiting for a top-down solution is a challenging strategy. The integrated deployment of onsite Solar PV combined with Battery Energy Storage (BESS) is a commercially viable, deployable technology that delivers greater energy independence, operational certainty, and a return on investment. 

Mexico Energy Partners offers a no-cost onsite energy quality study to provide a diagnosis of your facility's risks. This expert assessment will model the potential savings, return on investment, and resilience benefits of an integrated Solar + battery energy storage system (BESS) solution tailored to your operational needs. Contact us today to schedule your complimentary study and take the next step toward securing your energy future.