Paraguay is increasingly turning to off-grid solar solutions to electrify remote areas disconnected from the national grid. This shift comes amid concerns over the country’s heavy reliance on the Itaipú hydroelectric dam, which faces challenges from climate change and rising energy demands.
The Case for Off-Grid Solar in Paraguay
According to PV Magazine, a recent study by the World Bank’s Energy Sector Management Assistance Program (ESMAP) underscores the significant potential of off-grid solar in Paraguay.
The report, “Off-Grid Solar Market Assessment Paraguay,” reveals that 8% of the country’s population lives in areas without access to the national grid. This figure includes 58,000 households and 2,200 public facilities, such as health centers and schools.
The ESMAP report also notes that Paraguay’s dependence on hydropower is becoming increasingly precarious due to climate change and rising energy consumption. While the ItaipĂş dam—the world’s second-largest hydroelectric facility—has long been a primary power source, the country has recently been forced to import electricity from Argentina during periods of low water levels.
Most of Paraguay’s unelectrified population is concentrated in remote areas, with 96% living in the Chaco region. In response, the Paraguayan government is exploring off-grid solar to address this gap. The report suggests that these solutions could provide electricity to isolated communities while simultaneously reducing the country’s reliance on hydropower.
Paraguay’s Solar Potential and Current Landscape
Paraguay has significant potential for solar energy, thanks to its abundant sunshine and available land. The country’s first solar park, the 10 MW Planta Solar San Alfredo, opened in ConcepciĂłn in 2021.
However, solar energy still makes up a small part of Paraguay’s overall energy mix. Although the government has introduced net metering and feed-in tariff schemes to promote adoption, progress has been slow.
The ESMAP report identifies several barriers to expanding off-grid solar in Paraguay, including a lack of public awareness, limited access to financing, and the logistical challenges of transporting materials to remote areas. To overcome these hurdles, the report recommends establishing a dedicated regulatory framework for off-grid solar.
Investment and Market Opportunities
The report estimates that Paraguay’s off-grid solar market could be worth between $60 million and $80 million. It suggests the government could begin by electrifying 17,000 households and 300 public services with off-grid solar systems, requiring an initial investment of approximately $10 million.
The Paraguayan government is seeking private investment to develop its off-grid solar market. To that end, the report advises creating a favorable environment for private companies, developing a clear regulatory framework, and raising public awareness about the benefits of off-grid solar.
A Regional Perspective on Off-Grid Solar
Paraguay is not alone in exploring off-grid solar solutions in Latin America. Many countries in the region are considering this technology to improve energy access in remote areas, and the World Bank’s ESMAP program has been supporting such projects across the continent.
Off-grid solar offers a compelling solution for countries like Paraguay, where large segments of the population remain without electricity. By investing in this technology, Paraguay can extend energy access to remote areas, reduce its dependency on hydropower, and attract private investment.
As Paraguay continues to explore off-grid solar, it has the potential to become a model for other nations in the region facing similar energy challenges.
With the right policies and investments, off-grid solar could play a vital role in shaping Paraguay’s energy future.