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We caught up with Diego Palacios, director of Lifestyle Energy, a solar power installer based in Todos Santos, to talk about the challenges and opportunities of generating power in one of Mexico’s most isolated regions. From the limitations of the current grid to the growing demand for off-grid living, Diego explains why energy independence is becoming essential for homeowners and developers in Baja California Sur.
The State of Energy in Baja California Sur
How would you describe the current energy situation in the state, both for homes and for businesses?
In general, we’re seeing growth in demand but not enough investment in infrastructure. Todos Santos is a good example: the town depends on a transmission line that originates in La Paz and passes through El Triunfo, and that line is already operating at full capacity. So when a new hotel or housing project applies for a power connection, CFE — Mexico’s state utility — says no. There’s no available capacity.
And this isn’t only happening in Todos Santos. The East Cape and many northern areas still lack any formal grid connection. In those cases, developers and homeowners have two options: run diesel generators or go solar. The best approach is to combine solar generation with battery storage and use generators only as backup. In other words, off-grid living has become the default solution for much of the region.
What are the main limitations of the state’s power infrastructure, particularly in regions like Todos Santos and the East Cape?
Baja California Sur is what we call an energy island. We’re not connected to the national grid, so everything we consume must be produced locally, mainly in La Paz, where a power plant burns combustóleo, a heavy fuel oil that’s banned in many countries for its toxicity. When you drive by the plant, you can see the smoke; it’s not sustainable.
Because we can’t import power from other states, the system here is highly fragile. Electricity must be generated and consumed in real time, leaving no margin for error. That makes Baja’s grid one of the most delicate in Mexico, and explains why outages and voltage fluctuations are so common.
Why Solar — and Why It’s Complicated
Solar energy seems like the obvious solution. Why is it still so challenging to implement in Baja California Sur?
The main reason is that our electrical system isn’t designed to handle significant variations in generation. Imagine a solar plant producing 20 megawatts on a clear day. Then a cloud passes, and output suddenly drops to five. CFE doesn’t have the flexibility to compensate for that change immediately, so entire areas can experience outages.
Because of this, CFE has placed limits on the amount of solar capacity that can be connected to the grid. The system is too sensitive. That’s why, in Baja California Sur, solar works best as a self-contained solution: homes or businesses generating and storing their own energy, independent from the grid.
You mentioned that Baja is the only state where net metering isn’t allowed. How does that affect solar adoption and grid stability?
In most parts of Mexico, homeowners or businesses can send excess solar power to the grid during the day and draw it back at night. That’s what we call net metering. CFE acts as your virtual battery. But here in Baja California Sur, that’s not allowed. If you request a contract for it, CFE will deny it.
The restriction exists because our grid can’t handle those constant inflows and outflows of energy. It’s not that the government doesn’t want renewable energy; it’s that the infrastructure isn’t ready. So for now, the focus has to be on self-sufficiency: generating, storing, and managing your own power with batteries and intelligent systems.
Todos Santos as a Case Study
Todos Santos is often associated with sustainable living. What does energy independence look like there in practice?
Our focus as a company is energy independence: giving each home or business the ability to generate and store its own power. Ten years ago, that idea sounded ambitious; today it’s achievable. With modern solar panels and lithium-ion batteries, clients can build what is essentially a small power plant inside their property.
The technology is still relatively expensive, but when you’re developing a high-end home or a boutique hotel, it makes complete sense. These owners value stability and security. They don’t want to depend on an unreliable grid that can damage equipment or interrupt their operations. So in Todos Santos, energy independence isn’t just a convenience; it’s part of responsible design.
What kind of clients are you working with, and what motivates them to invest in solar systems?
Most of our clients are looking for a mix of three things: reliability, savings, and autonomy. Many have already lost appliances or food to voltage drops. Others are frustrated by rising energy costs. And then some people work remotely and can’t afford to lose power even for a few minutes.
When they install solar with storage, the change is immediate: they stop noticing outages. The transition is invisible: their Wi-Fi never drops, their systems stay on. For some, it starts as a practical decision; for others, it becomes a philosophy. Living with solar means taking control of your own resources. Once they experience that, they don’t want to go back.
Building a Local Solution
Beyond installation, you’re now launching a distribution company. What problem are you trying to solve with that new venture?
One of the biggest bottlenecks for solar in Baja isn’t technology. It’s logistics. Every piece of equipment must be imported from the mainland, and even minor delays can stall a project. If we’re serious about energy transition, we need a reliable supply chain here.
That’s why we decided to create a second company, Nova California Technology, dedicated to importation and distribution. The idea is to improve the flow of materials, reduce waiting times, and make sure local installers have what they need when they need it. It’s not just about business; it’s about building the foundation for a regional energy industry.
You’ve mentioned that even warranties can be logistically tricky. How will local distribution and service change that?
Today, if a battery fails or an inverter needs to be replaced, the process is absurdly complicated. Even if you bought the product legally and have a proper invoice, you’re required to ship it back to Guadalajara or Mexico City for warranty evaluation, sometimes a 30- or 50-kilogram unit. You have to pay the shipping yourself and provide an import document called a pedimento, which contains confidential information.
By handling distribution and warranty services within Baja, we eliminate those obstacles. Clients will deal with a local team that can solve problems quickly, and we’ll handle the manufacturer relationship directly.
Looking Ahead
How do you see the energy transition evolving in Baja California Sur over the next few years? Are you optimistic?
Yes, I’m optimistic — but I also think it depends on collaboration. Right now, many parts of the industry aren’t regulated or fully supported, so we have to work closely with the government to develop the right frameworks. We’ve started an energy transition program with the state government to share information, organize expos, and educate the community.
I’m not very political, but in this particular area, I do see movement in the right direction. Over the next five or six years, we have a real opportunity to grow responsibly and make renewable energy part of everyday life in Baja California Sur.
What role can the local community and private sector play in improving the region’s energy future?
It starts with awareness. Every homeowner, every business owner needs to think about how they use electricity — not just how to generate it. Even small steps help: using energy-efficient systems, installing partial solar setups for essential loads like refrigerators, pumps, or lighting.
Suppose more people combine solar generation with storage, even at a modest scale. In that case, it will reduce pressure on the grid and improve stability for everyone. That’s the real opportunity: a collective effort toward independence and sustainability. Once you experience living on solar power, you don’t just save money: you change your relationship with energy.