I have a 39 3/4" tall by 15 1/4" wide electric panel mounted on a 48" tall X 23 1/2" wide plywood backing board which is screwed into the concrete wall in my basement garage. I am going to be finishing this room and am trying to decide how to handle the panel. I don't want to build a closet around it because it is in the front of the room near where the windows will be going that will replace the garage door. The panel cover currently sits right about 5" from the concrete wall, which would work for a surface mount installation (1" XPS, 3 1/2" nominal of 2x4 stud depth, 1/2" drywall) if I remove and relocate the boxes currently mounted on the side panel knockouts. The only issue with this is that the panel will only have plywood separating the back from the concrete wall, and will not be insulated. I'm considering unmounting the panel, lifting it forward, and removing the plywood backing to place 1" XPS between the plywood and the concrete, but this will push my surface mount panel 1" out from the drywall. I could also leave everything as is, frame it out for surface mount, and then build a wooden cabinet over the front which I could put an insulated door over (access panel). I'm in the northeast so I don't really want to leave it surface mounted and uninsulated. Any thoughts?
Given the general pain of messing with the panel mounting, and the limited space for insulation even if you do, I'd strongly consider insulating the OUTSIDE of the wall right here. The position of the garage door suggests that it would not involve a huge amount of digging, and you can put exterior-type rigid foam with a stucco covering where it's above grade on the outside of the foundation wall while taking up no space inside, and not having to remount the panel.
First, before you commit to XPS, get a scrap of it and do a "flame test" with it in your own backyard. A lot of foam products are positively terrifying and as a pattern, homes are getting much more deadly. (UL test on flammability of modern homes) - no wonder midcentury modern is making a comeback LOL!
Since your plan is a stud wall anyway, you might as well just use normal rock wool or fiberglass. Here's a secret about insulation: What insulates is the air itself - and the foam or fiber is simply there to stop the air from convecting. That's why double-pane windows work - the panes are close enough together to stop air convection.
Second, I'd take a step back and maybe have a professional engineer review your best insulation options. You need to address vapor barrier because concrete is porous to water. Those concrete walls are a beautiful thermal mass that would be your friend, not your enemy if it was inside the insulation envelope. The more building mass you have inside the insulation envelope, the more the building naturally resists temperature change, and that means you're spending less energy fighting cyclical temperature change - summer afternoon heat and spring/fall nighttime cold.
I'm also sure you wouldn't mind the extra square footage from not needing stud walls! So there's a case to be made for digging up that wall and putting the insulation on the outside of it.
Anyway, you currently have 1-1/2" of material behind the panel, so you could replace that with 1/2" ply (or even a more non-flammable board) and 1" of a foam insulating panel whose flammability you are happy with. Remember that the lines coming from the meter to the main breaker are live at all times, and cannot be de-energized except by pulling the meter (and with modern smart meters the power company can sometimes do that remotely). The power grid is designed so if shorted, the fault energy can't exceed about 2 megawatts, or about the impact force of the Vulcan cannon on the F-15.