Mexico's Querétaro state to offer subsidies for renewable distributed generation

The energy agency of central Mexico’s Querétaro state is planning to offer subsidies to companies that invest in distributed generation projects based on renewable energy.

The subsidies will support firms that want to install small solar farms, the agency confirmed for BNamericas on Monday.

The agency said no timetable had been set for the introduction of the subsidies. It declined to specify the form that the subsidies will take.

The information was first published on the Energy21 website.

By using distributed generation facilities, businesses can reduce their dependence on Mexico's strained national grid, which has become prone to blackouts in recent years. DG investments do not require permits from state-owned utility CFE or energy regulator CRE.

Businesses can also use the technology to meet their commitments to cut greenhouse gases. On the public grid about 70% of electricity is generated using natural gas, mainly imported from the US by pipeline.

Companies in Mexico are limited to a maximum of 0.5MW of distributed generation capacity. 

Querétaro state is one of the leading recipients of foreign investment in Mexico. To benefit from the nearshoring trend the state government has focused on investing in infrastructure, especially in the energy sector.

In 2023, foreign direct investment in the state increased 54% to US$1.1bn.