Quick Answer
CFE (Comision Federal de Electricidad) uses a tiered rate system. Residential users in Cabo San Lucas are under tariff 1F (hot climate). You receive a subsidized rate for the first ~850 kWh/bimonthly (varies by season). Exceeding the DAC (Domestic High Consumption) threshold — approximately 2,500 kWh/bimonthly in the 1F zone — triggers commercial rates that are 3-5x higher. Solar panels help avoid DAC rates.
Detailed Answer
Mexico's federal electricity provider, CFE (Comision Federal de Electricidad), uses a tiered tariff system designed to subsidize basic residential consumption while penalizing high usage. In Los Cabos, residential properties fall under the 1F tariff — the hottest climate category — which provides the most generous subsidy thresholds. During summer months (April through October), the subsidized allowance rises to approximately 850 kWh per bimonthly billing period, recognizing the need for air conditioning.
The critical threshold to monitor is the DAC (Domestico de Alto Consumo) limit. If your rolling 12-month average consumption exceeds approximately 2,500 kWh per bimonthly period in the 1F zone, your entire account is reclassified to commercial rates — which are 3-5x higher than subsidized residential rates. Once triggered, it takes six consecutive bimonthly periods of below-threshold usage to return to residential rates. This is why solar panels have become extremely popular in Cabo, and many newer developments install them as standard equipment.
For larger homes with pools, multiple AC units, and entertainment systems, staying below the DAC threshold requires careful energy management. Our team advises buyers on expected electricity costs for every property and connects them with solar installers when appropriate. Explore more ownership cost details in our FAQ hub or contact us with specific questions.