Mexico is among the 15 largest economies in the world and is the second largest in Latin America. The country is highly dependent on the United States (U.S.). The U.S. is Mexico’s largest trading partner and the destination for almost 80% of its exports. Mexico also has a very strong trade relationship with Canada. Mexico is Canada's third largest trading partner (after the United States and China) in merchandise trade, and Canada is Mexico's fifth largest trading partner altogether (Data Mexico, 2024). Canadian direct investment in Mexico was $40.4 billion in 2023, making it the ninth largest direct investment destination for Canada (Government of Canada, 2025).
Distributed energy market in Mexico
Key opportunities for Canadian distributed energy companies in Mexico
- Distributed generation (solar power)
- Energy as a service
- Energy storage solutions that could addressing challenges with saturated photovoltaic systems and other renewable energy sources
- Hydrogen is currently being explored in Mexico for industrial and transportation applications
Notable challenges for Canadian companies in Mexico
- Policy and structural changes related to the Government’s regulatory entities.
- Unclear regulations, operation and implementation for the private sector.
- Infrastructure is heavily outdated and needs to be modernized to support distributed energy projects. Some infrastructure can be expanded while others need a complete makeover.
Mexico business landscape and key metrics
- 14 free trade agreements with 50 countries, including CUSMA.
- 30 Agreements for the Promotion and Reciprocal Protection of Investments (APPRIs) with 31 countries or administrative regions.
Industry highlights
MX $686B represents Mexico's GDP in the second quarter (Q) of 2024. This is a 10% increase from the previous Q and a 6.65% increase from 2023’s second Q.
Baja California, Querétaro, and Jalisco are the highest-ranking states for development opportunities.
US $367M was invested in Mexico as foreign direct investment (FDI) in 2023.
2,448 jobs were created in Mexico’s energy sector.
US $15,805M in FDI was recorded from 1999 to 2024, with Canada as the largest investor (US $4,381M).
- 63 solar farms installed in Mexico, with notable installations in the states of:
- Cuahuila
- Guanajuato
- Sonora
- Zacatecas
- Baja California Sur
- 71 wind farms installed in Mexico, with notable installations in the states of:
- Oaxaca
- Tamaulipas
- Guanajuato
- Puebla
- 8 Mexican states with carbon taxes:
- Zacatecas
- Jalisco
- Baja California
- Querétaro
- Yucatán
- Estado de México
- Guanajuato
- 37/40 ranking in the Global Cleantech Innovation Index.
Upcoming projects and events
- In December 2024, Jalisco established the Secretariat of Sustainable Energy Development (Secretaría de Desarrollo Energético Sustentable) to promote efficient and sustainable energy management within the state. While upcoming projects are still under review, projects already underway in the area include:
- La Yesca Hydroelectric Project: Located on the border of Nayarit and Jalisco, the La Yesca Dam is a hydroelectric facility with a capacity of 750 megawatts (MW). It was inaugurated in November 2012 and is part of the Hydroelectric System Santiago, which includes other dams like Aguamilpa and El Cajón.
- Guadalajara Light Rail Line 4: This light rail line is under construction to connect Guadalajara with the municipal capital of Tlajomulco. Spanning approximately 21.7 kilometers, the project aims to enhance public transportation and reduce traffic congestion. Construction began in May 2022, with completion initially planned for March 2024. It now looks like completion will be delayed until at least 2027.
- The TCS in Mexico organizes annual clean technology events. This includes our Cleantech Business Roadshow, where selected companies spend a week in Mexico meeting different interlocutors and promoting their solutions.
Summary
Mexico’s distributed energy sector presents substantial growth prospects. It is crucial for Canadian companies to navigate the regulatory environment effectively and adapt to policy shifts to ensure successful market entry and operations. As of March 2025, there are few opportunities for Canadian companies in the large-scale solar and wind sector for providing technology such as:
- photovoltaic panels
- inverters
- blades
- components provided by companies from countries including China, Spain, Germany and Denmark
In the solar sector, there may be more opportunities in topics related to:
- distributed solar energy
- energy as a service or storage as a service
- sectors with high energy consumption such as the automotive, food, metalworking sector
- service sectors such as tourism
For more information on Mexico, please contact: mxicoinfocentre@international.gc.ca