Distributed generation involves producing electricity on a small scale, close to or at the very location where it is consumed, rather than relying exclusively on large power plants. This type of generation, generally based on renewable energy, allows businesses to supply themselves directly, reduce their electricity costs, and even feed surplus power back into the grid. 

In Mexico, in accordance with the regulatory framework established by the Energy Regulatory Commission (CRE), distributed generation refers to facilities with a capacity of less than 0.5 MW (500 kW) connected to distribution grids, not transmission grids. In practice, the most commonly used systems under this framework are photovoltaic systems in commercial and industrial settings, followed by small wind turbines and hybrid solutions, such as solar with battery storage. 

Distributed generation is particularly important for Mexican companies because it directly affects costs, competitiveness, and sustainability. It is not just an environmental issue; it is a strategic decision. 

Currently, this method has seen significant growth in Mexico. By the end of 2024, the country had reached an installed capacity of 4.4 GW, and it is projected that by 2025 this figure will reach 5 GW, equivalent to about 8% of the electricity system’s peak demand. Of this capacity, approximately 99% corresponds to solar photovoltaic energy, with more than 500,000 registered interconnection contracts (source: AMIF – PV Magazine Latam). 

Benefits of Distributed Generation in the Mexican Industry 

1. Reduced energy costs:Electricity is one of the main operating expenses for many companies.

• Generating your own energy (e.g., solar panels) can reduce your electricity bill by 30% to 90%, depending on the situation.
• Protects against increases in electricity rates.
• It provides greater control over energy consumption. 

        In energy-intensive industries, this can amount to millions of pesos a year. 

2. Greater independence and reliability: In Mexico, some areas may have 

• Voltage fluctuations. 
• Power outages. 

      With distributed energy: 

• Dependence on the Federal Electricity Commission (CFE) grid is being reduced.
• Storage (batteries) can be integrated to ensure operational continuity.
• Energy stability is improved in critical processes.

3. Environmental Environmental and ESG compliance: more and more companies must meet sustainability standards. 

• Reduces CO₂ emissions.
• Helps achieve ESG (Environmental, Social, and Governance) goals. 
• Enhance your image with customers, investors, and partners. 

       Many global chains already require their suppliers to use clean energy. 

4. Ideal application for Mexico:it offers very favorable conditions.

• High levels of solar radiation (especially in the north and center).
• Large industrial roofs (warehouses, industrial parks).
• Relatively high electricity rates in certain sectors.
• Tax benefits, such as accelerated depreciation for investments in renewable energy, incentives, and green financing. 

      This results in a quick return on investment (ROI) (3–6 years in many cases). 

Opportunities in distributed generation in Mexico is based on a growing market, despite low penetration and high demand, which presents significant potential. This scenario is particularly attractive for the industrial sector, as well as for solar solutions with storage and financial models such as PPAs. 

Cristián Rodríguez

Country Head Mexico