Mexico lends itself to renewable energy development thanks to its favorable geographical conditions. The country enjoys around 300 days of sunlight each year, and with over 9,000 km of coastline, there is significant potential for growth across other renewable energy forms. 

The state of Sonora in northern Mexico has been identified by the National Autonomous University of Mexico as having the greatest solar potential in the country. If just 1% of Sonora’s land was used for solar projects it could provide enough energy to power all of Mexico.

Recently, a climate advocacy NGO called the Mexican Climate Initiative (ICM) developed a solar bond program to use a percentage of the money from the electric subsidy program to invest in solar energy projects. The funds are used to purchase solar photovoltaic (PV) modules to be installed on the rooftops of residential houses, particularly in heavily subsidized areas.

In recent years, Mexico has experienced an increase in the number of energy providers, making the market more competitive than before. While many industrial consumers stick to companies they know because of their well-established reputation, regularly surveying the market to see what deals are available may be prudent.

The market is favorable for solar energy projects thanks to low equipment costs, strong renewable energy policies, and several national solar power programs. Solar panels in Mexico cost an average of $3.07 per watt, and we expect this to decrease further as the development of solar becomes more commonplace.

Onsite generation, also known as distributed generation, has gained popularity in Mexico because of the challenging regulatory climate regarding energy power purchase agreements. Distributed generation in Mexico is classified as any system with a capacity below 500 kWp. Companies can save up to 25% with onsite solar.

What does a company need to get started with energy procurement in Mexico? We generally only need the location of the facilities and one year of utility bills to analyze the viable energy procurement options for a potential client.

Mexico Energy Partners helps companies to improve energy efficiency, but that needs to be followed up with continuous monitoring and management. Proper monitoring is the key to ensuring that management's plans are successfully implemented so that energy expenses remain low. 

The number of energy options available to businesses and consumers expanded dramatically over the last several decades, but those new options also created new risks. Energy contract provisions can limit those risks, but market participants must know where to look.

End users and industrial businesses are sometimes challenged by the lack of pipeline infrastructure that shuts them out of natural gas supplies in Mexico. This is an area for potential growth as either Mexican or foreign investors can seek out opportunities to build out this needed infrastructure.

Though the political environment poses some challenges because of an increase in nationalist rhetoric, the reality of Mexico’s current energy situation could make it difficult for the Administration to roll back reforms as quickly.

The coronavirus crisis placed many businesses in the unusual position of being able to save significant amounts of money through improved energy efficiency during protracted shutdowns. There are specific best practices that firms can use to determine how much they can save, safely make the changes, and then reverse the process when business starts up again.