As of 2023, Nicaragua has installed solar power capacity, with a total of 18 MW.⁵

Nicaragua aims to generate around 120 megawatts of power from solar energy by 2030. ⁶

⁷⁸¹¹

• The average cost of electricity generation from geothermal sources in Nicaragua is approximately USD 0.07 per kWh, according to available data.
• Available data indicates that the average cost of hydroelectricity generation in Nicaragua is approximately USD 0.05 per kilowatt-hour (kWh).

³

⁹¹⁰

• Nicaragua experienced a significant power outage on June 8, 2023, which affected 60% of its territory. The outage was triggered by failures in Costa Rica’s energy plants, which impacted the Central American interconnection system. The power outage began around noon and was resolved within a couple of hours.
• While the exact number of hours of electricity availability from the national grid in general is not directly available, this specific incident highlights how regional issues, such as those in Costa Rica, can affect Nicaragua’s electricity supply.
• The outage disrupted areas including the capital city, Managua, but the energy supply recovery was relatively quick, indicating that electricity availability can vary depending on infrastructure and interconnection issues in the region.

¹¹¹²

Latest data is not available, however;

• In January 2019, 700 households across six communities in San Juan de Nicaragua were connected to a newly constructed PV-ESS plant.
• Also, in Nicaragua, estimates suggest that only about 0.6% of the country’s electricity generation comes from solar energy. This indicates that a very limited number of homes are utilizing solar power, as the penetration rate in the residential sector remains low.

Projected installations

• While specific numbers of homes are not directly available, typically, 1 MW of solar power can supply electricity to about 200-250 homes, depending on the region’s energy consumption.
• El Hato Solar Project and San Benito-Tipitapa Solar Plant (100 MW combined) are significant future developments that will contribute substantially to the country’s solar capacity.
• Given this, these upcoming projects could potentially power around 20,000 to 25,000 homes

¹³

• As of 2022, Nicaragua has four operational solar plants.
• Additionally, the country is planning to install three more photovoltaic plants totaling 48 MW.

¹²

Current Off-Grid Solar Demand in Nicaragua:

• Over half of Nicaragua’s population, especially in the Caribbean and Atlantic coasts, lacks reliable access to the national electricity grid, creating an urgent demand for off-grid solar solutions in rural and isolated regions.
• Approximately 15,584 households in sparsely populated regions, such as the RAAS and RAAN, are in need of solar home systems (SHS) and mini-grids to meet basic energy needs.
• Existing mini-grids are heavily dependent on diesel power, which results in high operational costs and unsustainable financial burdens, driving the demand for solar photovoltaic (PV) systems to reduce dependency on diesel fuel.
• The dispersed population and difficult terrain in rural areas make it challenging to deploy and maintain traditional grid infrastructure, creating an opportunity for solar mini-grids to provide cost-effective, decentralized energy solutions.
• The high cost of solar systems, coupled with the lack of financing mechanisms, limits the adoption of solar solutions in rural areas, creating a gap between demand and supply.
• While initiatives such as FODIEN have begun deploying small-scale renewable energy solutions, demand continues to outpace supply due to limited outreach, insufficient infrastructure, and lack of financing for end-users.

Future Off-Grid Solar Demand in Nicaragua:

• Nicaragua aims to electrify over 3,666 communities through the National Plan of Sustainable Electrification and Renewable Energy (PNSER) by 2025, underscoring substantial demand for off-grid solar systems in remote and underserved regions.
• To meet electrification targets, significant expansion of solar mini-grids and solar home systems will be required in approximately 3,600 un-electrified villages across the country, with priority given to areas currently without access to the grid.
• The increasing need for solar-powered irrigation systems, as part of various rural development initiatives, will drive demand for solar technologies that support agricultural productivity and economic growth.
• Innovative PAYG financing models will help increase accessibility to off-grid solar systems for low-income households, further accelerating demand for affordable solar solutions.
• The development of battery storage technologies and hybrid systems will enhance the reliability of off-grid solar, ensuring consistent energy supply during periods of low sunlight and enabling communities to use solar energy even during cloudy weather or at night.
• Training initiatives to build a skilled workforce capable of installing, operating, and maintaining solar systems will be crucial for supporting the growth of Nicaragua’s off-grid solar market and ensuring its long-term sustainability.
• Continued international partnerships and funding from entities such as the World Bank, BCIE, and IDB, will provide the necessary financial and technical support to scale up solar initiatives, contributing to the country’s renewable energy goals and off-grid electrification efforts.

¹¹¹²

Current On-Grid Solar Demand in Nicaragua:

• Nicaragua’s on-grid solar demand is increasing as the country looks to diversify its energy mix and reduce dependence on fossil fuels.
• The national grid covers mainly the western part of the country, leaving much of the rural and remote areas still outside the reach of reliable electricity, but there is a growing push to integrate renewable energy, including solar power, into the grid.
• The government has initiated several projects to incorporate solar energy into the national grid, such as the installation of a 300-kilowatt photovoltaic system for 700 households in San Juan de Nicaragua.
• This model demonstrates how even remote areas can be integrated into the national grid with solar photovoltaic systems, addressing electricity access challenges.
• Current solar integration efforts are focused on large-scale solar plants and distributed generation systems that feed power into the grid, particularly in areas with available land and high solar potential.
• The development of on-grid solar is part of Nicaragua’s strategy to meet its renewable energy targets and reduce greenhouse gas emissions, contributing to the country’s sustainable energy goals.
• Financial and technical barriers still exist, such as the high initial investment required and limited financing mechanisms for both public and private entities.

Future On-Grid Solar Demand in Nicaragua:

• Future demand for on-grid solar in Nicaragua is expected to grow significantly as the country aims to expand renewable energy sources and achieve energy independence.
• Nicaragua’s National Plan of Sustainable Electrification and Renewable Energy (PNSER) includes the integration of solar energy into the national grid to meet electrification goals for underserved and rural areas.
• The demand for on-grid solar will be driven by the government’s goal to reduce the reliance on traditional fossil fuels and incorporate more sustainable energy into the national grid.
• The expansion of solar energy will also be fueled by international partnerships and investments from organizations such as the World Bank, IDB, and the European Investment Bank, which are supporting large-scale renewable energy projects.
• There will be an increased focus on solar mini-grids and small-scale solar projects to bring electricity to off-grid regions that will then be integrated into the national grid, enhancing grid resilience and reliability.
• As the cost of solar technology continues to decrease, on-grid solar installations are expected to become more economically viable for both public and private entities, making it easier to scale up solar projects.
• Future demand will also be influenced by the growing need for energy storage systems, allowing for better integration of solar energy into the grid, especially to ensure supply during periods of low sunlight or high demand.
• There will be a stronger push for policies and incentives to encourage the private sector to invest in on-grid solar, addressing financial barriers and promoting wider adoption across the country.

A Solar Energy Installation Manager in Nicaragua would earn approximately between $3,918 and $12,461 per year, with an average of around $7,900.¹⁴

The current population of Nicaragua is 6,967,864.¹⁵

Estimate for Factory Rent

Monthly Average Warehouse Rental Cost ¹⁶

• Lowest Rent: $115 for a small commercial module (108 sq ft) in León.
• Highest Rent: $11,500 for a large commercial module (5382 sq ft) in Los Robles, Managua.

But specifically for warehouse spaces, the rent for a 300 m² warehouse in Veracruz is $1,000.

Key Components of Administrative Costs

Salaries and Wages: ¹⁴

A Solar Energy Installation Manager in Nicaragua would earn approximately between $3,918 and $12,461 per year, with an average of around $7,900.

Commercial electricity ³

The electricity price for businesses is USD 0.212 per kWh.

Monthly Rents for Office Space ¹⁷

• Minimum Rent: $350 for a 22 sq m office in Villa Fontana.
• Maximum Rent: $5,040 for a 280 sq m office in Masaya.

Electricity Generation ¹²

• In Nicaragua, 80% of electricity generation is provided by private companies, including wind power from Consorcio Eólico Amayo (30 MW), thermal plants like Coastal Power’s Nicaragua and Chinandega stations (114 MW combined), and geothermal plants such as ORMAT (22 MW) and Polaris Energy Nicaragua (4.8 MW).
• Biomass plants, such as Monterosa and Nicaragua Sugar Ltd., also contribute by generating electricity from sugarcane bagasse. State-owned entities like Albanisa, GECSA (with three thermal plants), and HIDROGESA (96 MW hydroelectric) also play a key role in the country’s energy generation.

Transmission & Distribution ¹²

• In Nicaragua, electricity transmission is managed by the government-owned Empresa Nacional de Transmisión Eléctrica (ENATREL), which operates the transmission lines and oversees international electricity exchanges through the Centro Nacional de Despacho de Carga (CNDC).
• Distribution is handled by Unión Fenosa, ENEL, Zelaya Luz S.A., and small dealerships, with Unión Fenosa covering the western, central, and northern zones through its Disnorte and Dissur systems, while ENEL serves the Atlantic regions with isolated systems. Small utilities also provide power to remote areas, often generating their own electricity.

Energy Access ¹²

• As of 2022, 86.5% of the population in Nicaragua has access to electricity, reflecting significant progress in expanding the country’s electrical infrastructure, especially in urban areas.However, rural and remote regions still face challenges in full electrification.

Energy Exports ¹⁸

• Nicaragua’s top exports include Knit T-shirts ($1B), Gold ($979M), Coffee ($778M), Insulated Wire ($706M), and Rolled Tobacco ($407M). The country primarily exports to the United States ($4.09B), Mexico ($943M), Honduras ($541M), El Salvador ($437M), and Costa Rica ($230M).
• These exports reflect Nicaragua’s key industries, with the U.S. being its largest trading partner.

¹¹¹²

Solar Energy Laws and Regulations in Nicaragua:

Nicaragua has a supportive legal and regulatory framework that promotes solar energy development. The following key laws and regulations are designed specifically for renewable energy, including solar:

Renewable Energy Promotion Law (Law No. 532-2005):

• This law is a cornerstone for encouraging renewable energy, including solar power. It provides several incentives for renewable energy projects, such as exemptions from import duties, value-added tax (VAT), and income taxes for up to 7 years for solar energy power plants.
• The law also ensures priority purchase of electricity generated from renewable energy sources, including solar, by utilities, thereby supporting solar power development.

Electricity Industry Law (Law No. 272-1998):

• This law outlines the structure and governance of the electricity sector in Nicaragua, covering the roles and responsibilities of the entities involved in electricity generation, including solar power.
• It sets conditions for entities engaged in energy generation, transmission, and distribution, including those working with solar power systems.

National Energy Policy (Decree No. 13-2004):

• Nicaragua’s energy policy prioritizes the integration of clean renewable energy sources, with solar energy being a significant focus.
• The policy aims to promote the development of renewable energy projects like solar by reducing the costs of energy production, encouraging investments in solar technologies, and ensuring the country’s energy mix remains sustainable.

2020 Reform to the Renewable Energy Promotion Law:

• A significant reform was made to the Renewable Energy Promotion Law in 2020, which extended tax incentives for renewable energy projects, including solar. The reform allows temporary extensions of income tax exemptions for existing renewable energy generators and provides favorable terms for new solar energy projects.
• Additionally, the reform modifies energy pricing conditions for electricity generated from renewable sources, ensuring fair compensation for solar energy producers.

Nicaragua offers several incentives and subsidies to encourage the development and adoption of solar energy. These are primarily aimed at reducing the financial burden on businesses and households that invest in solar power systems. Below are some key incentives and subsidies related to solar energy: ¹¹¹²

Tax Exemptions for Solar Energy Projects

• Import Duty Exemptions: Solar equipment and materials needed for the installation of solar energy systems are exempt from import duties, significantly lowering the upfront costs for developers and businesses looking to install solar power systems.
• Value-Added Tax (VAT) Exemption: Solar energy projects are also exempt from the VAT on equipment and materials used in the construction and operation of solar power plants, further reducing the overall cost of the project.
• Income Tax Exemptions: Solar energy developers enjoy exemptions from income taxes for up to 7 years for the operation of renewable energy projects, including solar plants. This incentive helps solar power companies recover their investment more quickly.

Priority Purchase of Solar Power

• The Renewable Energy Promotion Law (Law No. 532-2005) mandates that utility companies must give priority to purchasing electricity generated from renewable energy sources, including solar. This guarantees a market for the electricity produced by solar plants, providing financial stability for solar energy investors.

National Energy Policy Support

• The National Energy Policy (Decree No. 13-2004) encourages the use of clean and renewable energy sources, which include solar power. It prioritizes the development of energy from renewable sources by offering economic incentives, such as subsidies for energy-efficient projects that integrate solar technologies into businesses or public services.

Tax Incentives for Companies Installing Solar

• Businesses that install solar power systems can benefit from tax credits or deductions depending on the scale and location of the project.

¹¹

Current Operational Projects

La Trinidad Solar Plant

• Location: Diriamba, Nicaragua
• Capacity: 1.5 MW
• Inauguration: 2014
• A small-scale solar plant contributing to the renewable energy grid of Nicaragua.

Solaris Solar Plant

• Location: Puerto Sandino, Nicaragua
• Capacity: 12 MW
• Inauguration: 2015
• One of the larger solar projects in Nicaragua, helping to diversify the country’s energy mix.

San Juan de Nicaragua Solar Plant

• Location: San Juan de Nicaragua, Nicaragua
• Capacity: 300 kW
• Inauguration: 2017
• A small-scale project aimed at providing renewable energy for the local area.

Corn Island Solar Plant

• Location: Corn Island, Nicaragua
• Capacity: 2.5 MW
• Inauguration: 2018
• This plant serves to reduce the reliance on non-renewable sources on the island.

Future Projects

El Hato Solar Project

• Location: Terrabona, Matagalpa, Nicaragua
• Capacity: N/A (Total Investment: US$ 106.1 million)
• Expected Inauguration: 2025
• A significant solar project backed by China Communications Construction Company, contributing to Nicaragua’s renewable energy capacity expansion.

San Benito-Tipitapa Solar Plant

• Location: Between San Benito and Tipitapa, Nicaragua
• Capacity: 100 MW
• Expected Inauguration: 2025
• This project, a collaboration between EPR Solar and Israeli investors, will significantly boost Nicaragua’s solar energy capacity.

Company Name: Nicamisol

• Location: Managua, Nicaragua
• Website: https://nicamisol.com/
• Products and Services:
  • Residential Solar Installations
  • Commercial Solar Installations
  • Industrial Solar Installations

Company Name: Chm Energía

• Location: Hialeah, Nicaragua (Calle 33 Suroeste, 13002)
• Website: https://www.chmenergia.com/
• Products and Services:
  • Energy Efficiency Services (including energy audits for improvement and savings)
  • Photovoltaic Solar Energy
  • Other Energy Services (with a global development vision)
  • Technical Consulting

Company Name: ECAMI

• Location: Altos de Santo Domingo, Residencia Embajador de Venezuela, 200 meters West, Managua, Nicaragua
• Website: https://www.ecami.com.ni/
• Products and Services:
  • Photovoltaic Solar Energy Systems
  • Thermal Solar Energy Systems
  • Energy Storage Systems (Battery Energy Storage)
  • Solar Water Heating (Solar and Gas)
  • Electric Mobility (Energy for transport)
  • Planning, Design, Installation, Operation, and Maintenance of Solar Systems
  • Green Financing