Nearshoring and Solar in Mexico — The C&I Opportunity for EPCs

What Nearshoring Is and Why It Matters for Solar

Nearshoring is the relocation of manufacturing operations from distant countries (primarily China and Southeast Asia) to countries closer to the end market. For the US market, Mexico is the primary nearshoring destination. Its advantages are proximity to the US border, lower labour costs than the US, preferential trade access under the USMCA trade agreement, and an established manufacturing infrastructure in northern states.

Since 2022, Mexico has seen an acceleration in manufacturing FDI driven by US China trade tensions, supply chain resilience concerns after the pandemic, and the CHIPS Act incentivising semiconductor related manufacturing in the Americas. Mexico's Secretaría de Economía reports record FDI inflows. Industrial parks in Nuevo León, Chihuahua, Baja California, Coahuila, and San Luis Potosí are at or near capacity. New parks are being built to meet overflow demand.

Every factory that opens in these corridors is a commercial solar opportunity. A 10,000 square metre manufacturing facility might have 1 to 3 MW of rooftop solar potential. An industrial park with 20 tenants represents 20 to 60 MW of distributed solar opportunity within a few square kilometres. EPCs who are present in these markets and known to industrial park developers and tenant companies will capture a disproportionate share of this pipeline.

Why Nearshored Factories Buy Solar

Nearshored factories buy solar for three reasons, and understanding which is most important to each client determines how you should pitch.

Electricity cost

CFE's industrial tariffs have increased 4 to 6% annually over the past decade. A factory paying MXN 2 million per month in electricity bills in 2026 will pay MXN 2.5 to 3 million by 2031 at this rate. Solar locks in zero cost generation for 25 years. For a production focused manufacturer, this is a direct input cost reduction that improves margins.

Corporate sustainability targets

The parent companies of most nearshored manufacturers in Mexico have made public commitments to renewable energy. Companies under RE100 or Science Based Targets initiative commitments must demonstrate renewable electricity sourcing across their global operations. A Mexican subsidiary that installs solar can contribute to the parent company's global RE reporting. This requirement often makes solar a non negotiable item in the facility setup budget, not a discretionary investment.

Grid reliability

Northern Mexico has experienced grid stress during extreme heat events. Some industrial areas face voltage instability during peak summer demand periods. A solar installation with battery backup provides operational resilience that factory managers value beyond the energy cost saving alone.

Where to Focus

• Nuevo León (Monterrey area): Mexico's most active industrial state for nearshoring. Automotive, aerospace, steel, and electronics manufacturing. High electricity consumption per factory. CFE's Noreste division serves this area.
• Chihuahua (Ciudad Juarez and Chihuahua City): Largest concentration of maquiladoras in Mexico. Electronics, automotive parts, medical devices. Strong solar resource (high irradiance). CFE Norte division.
• Baja California (Tijuana and Ensenada): Electronics and medical device manufacturing. Unique in that it operates on the US Pacific time zone. Some areas served by CENACE's Baja California interconnected system which has specific DG connection rules.
• Coahuila (Saltillo and Ramos Arizpe): Automotive manufacturing hub. BMW, General Motors, Chrysler operations. Large roof areas, high consumption per site.
• San Luis Potosí: Growing industrial corridor. BMW plant, auto parts, logistics. Mid size factories with good rooftop solar potential.

Frequently Asked Questions

Q1. Do nearshored factories qualify for Mexico's DG framework?

Yes, provided their system is 700 kW or below under the updated April 2026 rules. Larger systems above 700 kW must operate under a different regulatory track — either as large scale generators under a generation permit, or through the clean energy certificate (CEL) market if they qualify. For factories with electricity demand above the DG threshold, a PPPA (Private Power Purchase Agreement) with an independent power producer is often the most practical route. EPCs working with larger industrial clients should familiarise themselves with both the DG framework and the PPPA market to offer the right solution for each client's size.

Q2. What is the typical solar project size for a nearshored factory?

Typical ranges vary by industry. Electronics assembly facilities (moderate load, large roof area) typically support 300 to 800 kW of rooftop solar. Automotive parts manufacturers (high load, very large roof) often support 500 kW to 2 MW depending on the production footprint. Medical device and pharmaceutical facilities (moderate load, strict power quality requirements) typically range from 200 to 600 kW. Logistics and warehousing (lower load, very large flat roofs) can support 500 kW to 1.5 MW of rooftop capacity despite relatively lower consumption per square metre. For any industrial client, the right system size is the one that maximises self consumption during operating hours — not the one that maximises installed capacity.

Sources

• Secretaría de Economía Mexico — economia.gob.mx — FDI data 2023 and 2024, nearshoring investment breakdown by state
• USMCA — ustr.gov — US-Mexico-Canada Agreement trade framework
• PV Magazine Mexico — pv-magazine-mexico.com — Nearshoring and C&I solar opportunity in Mexico 2025 to 2026
• Mercom India — mercomindia.com — Global solar market comparison — Mexico emerging C&I segment (2026)