In Paraguay, there’s a growing interest in 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 ItaipĂş hydroelectric dam, which is facing challenges from both climate change and increasing energy demand.
Off-Grid Solar as a Grid Alternative
A recent study by the World Bank’s Energy Sector Management Assistance Program (ESMAP), highlighted by PV Magazine, underscores the potential of off-grid solar in Paraguay. The report, titled “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 services, such as health centers and schools.
The ESMAP report also notes that Paraguay’s dependence on hydropower is growing more precarious due to climate change and rising energy consumption. Although the ItaipĂş dam—the world’s second-largest hydroelectric facility—has long been a primary power source for Paraguay, the country was recently 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% residing in the Chaco region. To address this challenge, the Paraguayan government is actively exploring the potential of off-grid solar. The report suggests this approach could bring electricity to isolated communities while simultaneously reducing the country’s reliance on hydropower.
Paraguay’s Untapped Solar Potential
Paraguay has significant potential for solar energy, thanks to its abundant sunshine and available land. The country’s first utility-scale solar park, the 10 MW Planta Solar San Alfredo, opened in Concepción in 2021. Despite this, solar energy still makes up only a small part of Paraguay’s overall energy mix. While 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, restricted access to financing, and logistical challenges in transporting materials to remote areas. To address these issues, the report recommends establishing a clear regulatory framework for off-grid solar.
Investment Opportunities in Off-Grid Solar
The report estimates that Paraguay’s off-grid solar market could be worth between $60 million and $80 million. As a starting point, it suggests the government could electrify 17,000 households and 300 public services with off-grid solar systems, requiring an initial investment of approximately $10 million.
The Paraguayan government has expressed interest in attracting private investment to develop its off-grid solar market. To that end, the report recommends creating a favorable environment for private companies, developing a clear regulatory framework, and raising public awareness about the benefits of off-grid solar.
The Latin American Context
Paraguay is not alone in Latin America in its exploration of off-grid solar solutions. Many other countries in the region are turning to off-grid solar to improve energy access in remote areas, with the World Bank’s ESMAP program supporting such projects across the continent.
Off-grid solar solutions offer a compelling alternative for countries like Paraguay, where large parts of the population remain without electricity. By investing in this technology, Paraguay can extend electricity access to remote areas, reduce its dependency on hydropower, and attract private investment.
As Paraguay continues to develop its off-grid solar solutions, the country 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 pivotal role in Paraguay’s energy future.
