Mexican energy reforms unlocking new opportunities for solar power and distributed generation

With demand from corporate customers for clean energy rising and a more favorable regulatory environment emerging, Mexico's distributed generation sector is entering a period of rapid growth.

To find out how companies in Mexico are embracing solar power and to discuss the outlook for the market, BNamericas caught up with Andrés Friedman, co-founder and CEO of Solfium.

Solfium, a startup focused on delivering solar energy solutions in Mexico, this year received investment from Wayra Hispam, the venture capital arm of Telefónica Movistar. 

In a wide-ranging email interview, Friedman discusses evolving demand for solar power, ongoing regulatory changes in Mexico and the potential impact of US protectionism on demand for clean energy solutions from Mexico's export-centered industries.

BNamericas: How is demand growing for Solfium’s distributed generation services in Mexico?

Friedman: We have been growing sales at almost three times per year since our commercial launch in 2022. Solfium provides a unique solution that facilitates the adoption of distributed solar energy at scale. We work with corporate clients, helping them deploy solar to decarbonize their value chain (including industrial installations at their own facilities, as well as their suppliers, distributors, and employee homes).

BNamericas: In what sectors and regions are your larger commercial customers concentrated?

Friedman: Most of our corporate customers are in Mexico City, Monterrey and Guadalajara. However, their industrial facilities are located all over the country. We have seen a lot of development in the center and northeast of Mexico with our automotive and manufacturing customers, as well as in the south and southeast with retail customers.

BNamericas: What is the outlook for the Mexican distributed generation (DG) market?

Friedman: The outlook for the Mexican distributed generation market remains highly positive, with consistent growth trends. In 2024, the energy regulator (CRE) reported 488,463 DG contracts, an increase of 28% compared with 2023. In terms of installed capacity, the CRE recorded 4,200MW in 2024, up from 3,114MW in 2023, marking an increase of 35%.

This growth will be further driven this year by new regulations that promote self-consumption of distributed solar, reflected in the increase in the DG threshold and the integration of regulatory frameworks, such as “isolated supply” (behind-the-meter systems). Solfium is capitalizing on this market trend and remains bullish on the expansion of the solar market in Mexico.

BNamericas: Is Solfium seeing any impact from nearshoring? Is nearshoring increasing demand for your decarbonization services?

Friedman: Yes, Solfium has been increasingly approached by manufacturing companies that have recently set up operations in Mexico and are looking to install solar energy systems from the outset. Over the years, Mexico has become a preferred destination for nearshoring, benefiting from its strategic geographic location and strong international trade agreements. This trend is significantly increasing the demand for solar energy, driven by several key factors: environmental commitment, cost efficiency, government support and energy capacity constraints.

BNamericas: Are you concerned that with Donald Trump in office, nearshoring in Mexico and demand for decarbonization in general could slow down?

Friedman: During Trump’s first administration, solar energy saw massive growth, even in traditionally fossil-fuel-reliant states like Texas. This proves that, regardless of political shifts, the adoption of renewable energy continues due to its economic and strategic advantages.

Moreover, many companies are aligning with global sustainability standards, reinforcing the long-term trend toward decarbonization. A key example is the European Carbon Border Adjustment Mechanism (CBAM), which imposes carbon tariffs on imported goods, encouraging companies worldwide to reduce emissions.

Since Mexican businesses are deeply integrated into global value chains, especially in industries exporting to the EU and other regions with strict regulations, they will continue implementing sustainability measures to remain competitive.

BNamericas: What impact will change to the regulations for distributed generation in Mexico have on the market and on Solfium?

Friedman: The recent regulatory changes in Mexico’s DG, including the proposed increase in the exemption limit from 0.5MW to 0.7MW under the national energy plan 2024-30, are set to significantly benefit the commercial and industrial sectors. 

These updates will allow businesses to invest in larger solar projects, lower their operational costs, and advance their sustainability goals more efficiently. For instance, this increase in threshold of 0.2MW (40%) can result in an additional reduction of more than 4,275t of avoided emissions over a typical 25-year system lifespan, significantly contributing to Mexico’s decarbonization goals.

Beyond distributed generation, another major regulatory shift is the expansion of isolated supply, now allowing businesses to deploy up to 20MW of solar installations for self-consumption without injecting energy into the grid. This change represents a significant opportunity for large energy consumers (such as manufacturing plants and industrial complexes) who can now secure their own energy supply and gain greater control over their energy costs.

For Solfium, these regulatory shifts open new avenues for growth. As companies look to capitalize on both expanded DG limits and isolated supply opportunities, demand for customized, high-efficiency solar solutions is expected to rise.

BNamericas: How do you see the Mexican battery storage market growing? What demand are you seeing from customers in this space?

Friedman: The Mexican battery storage market is experiencing growing momentum across both the industrial and residential sectors. In the industrial sector, businesses – particularly those with high energy demand and ambitious decarbonization goals – are integrating storage with solar energy to enhance self-consumption, reduce peak demand charges and mitigate grid intermittency risks. 

BNamericas: You’ve raised US$4.2mn in seed and pre-series A funding. What will you use these funds for?

Friedman: The seed round was successfully closed in 2023, and we have just announced our pre-series A with Wayra Telefónica. This funding has been invested in developing our technology and strengthen our structure to support our growing customer base.

Solfium is currently raising a series A to continue driving these advancements and further accelerate our growth.