Mexico Renewable Energy Market Size Analysis Report - Market Share, Forecast Trends and Outlook (2024-2032)

Mexico Renewable Energy Market Growth

Mexico has the potential to become the clean energy powerhouse of North America and establish 24,918 GW of solar farms and 3,669 GW of wind farms. With an anticipated increase in private sector investments, the country can achieve 2.5 GW of energy from geothermal sources and 1.2 GW from hydropower sources, which can contribute to Mexico renewable energy market opportunities. This can not only result in substantial savings on electricity bills for consumers, but it can also boost the nation’s economic growth by prompting American and European businesses to shift their place of operations. This is expected to drive the market expansion in the forecast period.

Mexico Renewable Energy Market Trends

Winter storms in Mexico have eroded 500 metres of coastal land since 2005, signalling the urgent need for reducing Mexico’s reliance on fossil fuels and shifting towards more sustainable sources of energy. The sea level in the Gulf of Mexico is rising three times faster than the global average, and this has endangered the lives of various coastal communities in the region, which can have a major impact on the demand of Mexico renewable energy market.

As per the Mayors Migration Council of Mexico, up to 8 million Mexicans are expected to get displaced because of climate change-induced landslides, floods, and other natural disasters. This is expected to accelerate the efforts of the Mexican government towards ensuring a swift transition to clean energy, which can directly impact the market growth.

Recent Developments

As per the Mexico renewable energy market dynamics and trends, Sempra Infrastructure, a division of Sempra, announced that it has secured a 319 MW order for the Cimarron wind farm located in Tecate, Baja California, Mexico. This project represents the third phase of the Energia Sierra Juarez Wind Complex, which will ultimately achieve a total installed capacity of 582 MW. The order contains the supply and installation of 46 V163-4.5 MW turbines alongside 18 V162-6.2 MW turbines. Upon the project's completion, Vestas will also provide a 10-year service agreement (AOM 5000) aimed at optimising energy production and ensuring long-term operational viability for the wind farm.

Industry Outlook

As per the Mexico renewable energy industry analysis, Mexico has committed to generating 35% of its electricity from clean energy sources by 2024. To achieve this, the government plans to deploy more than 30 additional gigawatts of combined wind, solar, geothermal, and hydroelectric capacity by 2030. Moreover, in October 2024, President Claudia Sheinbaum announced a renewed focus on renewable energy, aiming for renewables to constitute 45% of electricity production by 2030. This marks a significant shift from previous policies that favoured fossil fuels.

Cubico Sustainable Investments has successfully completed two transactions designed to enhance its footprint and development portfolio in Mexico, which can contribute to the growth of the Mexico renewable energy industry. These acquisitions, which involve the purchase of Renantis Mexico and a strategic alliance with Sowitec Group, represent a significant milestone for the company as it exceeds a capacity threshold of 1.6 GW in its Mexican operations. This initiative highlights Cubico’s unwavering commitment to promoting renewable energy projects within the nation. The acquisitions include a varied selection of at least 12 solar and hybrid projects distributed across seven states, each at different stages of development. Consequently, Cubico’s development portfolio in Mexico now totals an impressive 2.2 GW, in addition to its three operational projects: Mezquite, Solem 1, and Solem 2.

Government Support and Rich Natural Resources Drive Market Growth

• Mexico's rich natural resources, including abundant solar and wind energy potential, are significant drivers for the renewable energy market.
• Mexico’s geographic position allows access to vast wind resources in regions like Oaxaca and strong solar radiation in northern states, helping the country become a key player in renewable energy and boosting the Mexico renewable energy industry revenue. 
• Mexico's commitment to reducing greenhouse gas emissions and achieving its renewable energy targets is promoting market growth.
• Technological advancements and decreasing costs of renewable energy technologies are making projects more economically viable.
• Mexico's Energy Transition Law and other government initiatives support the growth of renewable energy through incentives, tax benefits, and regulatory frameworks.

Regulatory Challenges and Infrastructure Limitations Hinder Market Growth

• Regulatory challenges, including changes in policies and tariffs, can create uncertainty and affect investor confidence.
• Infrastructure limitations, such as inadequate grid capacity and connectivity, can hinder the integration and distribution of renewable energy, impacting Mexico renewable energy demand forecast.
• High initial investment costs and long payback periods can be barriers for some renewable energy projects.
• Limited availability of financing options for renewable energy projects can restrict market growth.
• Resistance from traditional energy sectors and vested interests can pose challenges to the adoption of renewable energy.

Expanding Energy Demand and International Collaboration Present Growth Opportunities

• Expanding energy demand due to population growth and industrialisation presents significant growth opportunities for the market.
• Increasing international collaboration and partnerships with renewable energy companies are driving technological transfer and fuelling growth of the Mexico renewable energy market.
• Development of innovative financing mechanisms and incentives can attract more investments in renewable energy projects.
• Rising awareness and demand for sustainable and clean energy sources among consumers and businesses are boosting market growth.
• The potential for off-grid and distributed renewable energy solutions in remote and rural areas is creating new market opportunities.

Mexico Renewable Energy Industry Segmentations

Mexico Renewable Energy Market Report and Forecast 2024-2032 offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Solar
• Wind
• Hydro
• Geothermal
• Others

Mexico Renewable Energy Market Share

Solar energy is expected to grow at a CAGR of 9.6% in the forecast period. Mexico’s solar energy capacity has expanded rapidly over the past decade. The country’s geographical position offers ample sunlight throughout the year, making it ideal for solar energy production. There has been a surge in investment from both domestic and international players, with the construction of large-scale solar farms across various states like Sonora and Chihuahua, which fuels the Mexico renewable energy market value. These projects help Mexico diversify its energy sources and reduce its reliance on fossil fuels.

Wind energy is anticipated to exhibit a CAGR of 9.0% between 2024 and 2032. Mexico’s unique geography provides several ideal locations for wind energy, particularly in regions like Oaxaca and the Gulf of Mexico. These areas have high wind speeds, making them efficient for wind farm installations.

Competitive Landscape

The key Mexico renewable energy market players are Enel Spa, Siemens AG, RWE Aktiengesellschaft, ENGIE SA, Iberdrola, SA, Canadian Solar Inc., Dominion Energy, Inc., ACCIONA SA, and Electricité de France S.A., among others.

Enel Spa

• Enel Spa is a leading player in Mexico’s market, known for its significant investments in solar and wind energy projects. The company’s focus on innovation and sustainability has solidified its market presence and fuelled the Mexico renewable energy demand. 
• Enel emphasizes continuous investment in renewable energy projects and technological innovations to improve energy efficiency and reduce costs. The company also focuses on strategic partnerships and acquisitions to expand its market reach and enhance its renewable energy portfolio.

Siemens AG

• Siemens AG is a prominent player in the renewable energy market, offering a comprehensive range of solutions, including wind turbines and grid infrastructure. The company’s strong emphasis on technological innovation and quality has bolstered its market position.
• Siemens invests heavily in research and development to introduce advanced renewable energy technologies. The company also engages in strategic collaborations and acquisitions to enhance its product offerings and boost Mexico renewable energy demand growth.

RWE Aktiengesellschaft

• RWE Aktiengesellschaft is recognized for its extensive portfolio of renewable energy projects, particularly in wind and solar power. 
• RWE focuses on continuous expansion of its renewable energy capacity through strategic investments and acquisitions. The company also prioritizes technological advancements and sustainability initiatives to improve the efficiency and environmental impact of its projects.

ENGIE SA

• ENGIE SA is a key player in the market, known for its diversified portfolio of renewable energy projects, including solar, wind, and hydropower. The company’s focus on sustainability and innovation has strengthened its market position and can enhance the Mexico renewable energy market revenue. 
• ENGIE invests in state-of-the-art technologies and sustainable practices to deliver high-quality renewable energy solutions. The company also emphasizes strategic partnerships and acquisitions to expand its renewable energy portfolio and enhance its market presence in Mexico.

Mexico Renewable Energy Market Regional Analysis

Northern Mexico receives abundant sunlight year-round, making it ideal for large-scale solar energy projects. Sonora, for instance, has one of the highest solar irradiance levels in Mexico, attracting substantial investments in solar farms. Multiple solar farms are already operational, with many more in planning stages, due to both the climate and the state incentives for solar energy, which can contribute to Mexico renewable energy market share. The area also benefits from proximity to the U.S. border, making cross-border energy trade a possibility.