As of World Fact Report on Panama-2024, Panama’s total installed Panama solar energy capacity stands at approximately 111.5 MW. This capacity accounts for about 2.7% of the country’s total installed electrical generation capacity, which is 4,116 MW. The majority of Panama’s energy generation comes from hydroelectric sources, followed by fossil fuels, wind, and a small percentage from solar power​.⁵

The plan is to install between 1 GW and 1.6 GW of new solar and wind capacity by 2030.⁶

Latest and accurate data is not available by reliable sources. The estimated average cost of electricity generation from different sources are as follows:⁷

• Coal: USD 0.088 per KWh
• Solar: USD 0.056 per KWh
• Wind: USD 0.05 per KWh
• Hydro: USD 0.05-0.075 per KWh
• Gas: USD 0.06 -0.07 per KWh
• Nuclear: USD 0.069 per KWh

In 2022, hydroelectric power was the primary source of electricity in Panama, followed by gas and solar.⁸

Panama has very good infrastructure of the reliable electricity as 95% population is electrified. The average power supply in Panama from the electricity grid per day is 22 to 24 hours.⁹⁴

Finding the actual number of residential solar panels in Panama can be challenging due to limited data availability on the internet. However, Panama has seen impressive growth in solar power installations, increasing its installed capacity from just 4 MW in 2013 to a notable 522 MW by the end of 2022. By July 2023, solar photovoltaic plants accounted for approximately 11% of Panama’s total installed power generation capacity.¹⁰

Panama has experienced significant growth in solar energy development. Currently, the country has around 12 operational solar and hydro farms contributing to its renewable energy capacity. Additionally, there are plans to add six more solar farms by the end of 2024, with investments from companies like Cervecería Nacional driving these efforts. Moreover, 51 solar projects hold provisional licenses, with a combined capacity of 1,375 MW.¹¹¹²

The off-grid solar panel market in Panama is experiencing significant growth, driven by the demand for reliable and independent energy solutions. There is no tangible information available by reliable resources.

• Current Demand: The demand for off-grid solar systems is largely influenced by the need for electricity in remote and rural regions, where grid connectivity is limited or non-existent. This demand is fueled by both residential and industrial sectors looking for reliable power solutions.
• Projected Growth: The off-grid solar market is expected to grow steadily in the coming years, with increasing interest in solar energy as a means of ensuring energy security and reducing dependency on traditional power sources. The market is anticipated to expand with advancements in energy storage technologies, which address the intermittency issues of solar power.

• Current: Panama’s installed solar PV capacity has shown significant growth, reaching 522 MW by the end of 2022. This marks a substantial increase from earlier years, reflecting the country’s commitment to expanding its renewable energy infrastructure.¹⁰
• Projected: According to the Panama National Energy Plan 2015-2050, the goal is for renewable energy to account for 70% of the country’s installed power capacity by 2050.

The average monthly salaries for solar energy professionals include:¹³¹⁴

• Solar Design Engineer: $2882-$2900
• Electrical Engineer: $2000-$3000
• Solar Sales Manager: $2000-$4000
• Solar Sales Representative: $1200-$1500
• Solar Electrician: $700 – $ 1000
• Labor Cost: $265-$800

The population of Panama is approximately 4,409,000.¹⁵

The average overhead costs for solar panel production in Panama involve several components:

• Raw Material Costs: Raw materials, such as silicon, aluminum, and copper, are major expenses. These costs fluctuate based on global supply and demand, geopolitical events, and economic conditions.
• Labor Costs: Labor costs in Panama for the solar industry can be significant, average $265-$800.¹⁶
• Minimum Wage: Panama has a national minimum wage that varies depending on the sector
• Public Sector: Around $265-$800 USD per month
• Private Sector (non-agricultural) $1.27 to $3.85, depending on the region and sector.
• Average Salary: The average sits around roughly $265-$800 USD per month but can vary significantly by industry, experience, and location
• Utilities and Energy Costs: In Panama, the costs of utilities and energy vary depending on consumption and location. Here’s a breakdown:
• Electricity Prices: As of December 2023, the price of electricity in Panama is $ 0.154/ KWh and $ 0.185 / KWh for residential and commercial respectively.³
• Water Charges: In 2006, the Ministry of Health reported that 97% of people had access to safe drinking water and basic sanitation services.¹⁷
  • Commercial Outside – 3: Meter Size (5/8 to 8 inches): Rates range from 8.43 to 673.60
  • Commercial Inside – 2: Meter Size (5/8 to 8 inches): Rates range from 6.74 to 538.88
  • Residential Outside – 1: Meter Size (5/8 to 8 inches): Rates range from 8.43 to 673.60
  • Residential Inside – 0: Meter Size (5/8 to 8 inches): Rates range from 6.74 to 538.88
• Facility Maintenance: Costs related to maintaining manufacturing facilities, including rent, equipment maintenance, and repairs, typically range from $2,000 to $8,000 per month. Here’s a rough estimate (based on limited publicly available data) rates varies location to location:¹⁸
• • Smaller Factories (500-1000 sqm): Approximately $1,800 – $3,400 USD per month.
  • Medium Factories (1000-2000 sqm): Around $3,400 – $5,600 USD per month.
  • Larger Factories (2000+ sqm): Approximately $5,600+ USD per month.
• Administrative Expenses: These include salaries for administrative staff, office supplies, and other general expenses, adding a significant portion to the overhead. The average monthly salaries for solar energy professionals include:¹³¹⁴
• Solar Electrician: $700 – $ 1000
• Labor Cost: $265-$800
• Quality Control: Ensuring the solar panels meet performance and safety standards involves expenses for testing and inspections.

Panama, a high-income country experiencing rapid economic growth, has a diverse energy sector that heavily relies on imported oil. Hydropower is a significant component of the nation’s electricity mix, representing 43.9% of installed capacity and 67.2% of total electricity generation as of 2020. While renewable sources like wind and solar are contributing more to the energy mix, they still play a relatively minor role. Challenges arise from climate variability, which affects hydroelectric production and complicates water resource management. In response, the Panama Canal Authority has introduced a Fresh Water Surcharge (FWS) to control the maximum draft for Canal transits, aiming to conserve water and maintain lake levels despite reduced rainfall.¹⁹

Energy use and emissions in Panama, on a per capita basis, are in line with other Central American nations. The country’s National Energy Plan 2015–2050 lays out a long-term vision for energy sector development, emphasizing renewable energy growth. The plan aims for 15% of Panama’s electricity generation to come from renewable sources by 2030 and 50% by 2050, demonstrating a strong commitment to expanding renewable energy infrastructure, particularly solar power, to meet future electricity demands.

In Panama, the government has implemented several regulations and incentives to encourage solar panel production and the adoption of renewable energy. Key measures include:²²²³

1. Environmental Impact Assessments (EIA): All solar projects must undergo EIAs to assess their environmental impacts. This requirement ensures that projects align with environmental sustainability standards and receive approval from relevant authorities​
2. Distributed Generation Guidelines: The government promotes distributed generation (DG) by setting technical standards and regulations. These include increasing installed capacity limits for DG systems, simplifying procedures, allowing surplus energy sale, and regulating remote installations​ .
3. Grid Modernization and Technical Standards: There are specific regulations to modernize the grid and integrate renewable energy, including solar. This involves updating technical standards and ensuring the grid can handle the variability and intermittency of renewable energy sources​.

These regulations aim to encourage the responsible growth of the solar sector while ensuring environmental protection and grid stability.

The government has implemented various measures to advance solar panel production and boost renewable energy use. The National Assembly of Panama has enacted Law 417, which expands incentives for the solar power sector. This legislation introduces new benefits such as tax exemptions and import duty relief for individuals and entities engaged in the solar industry, covering both equipment and materials needed for solar projects.¹⁰²⁰²¹

• Tax Incentives: Solar photovoltaic equipment is exempt from import taxes and value-added tax (VAT). Additionally, there are income tax credits of up to 5% for investment in solar energy projects, along with accelerated depreciation benefits.
• Net Metering Policy: Introduced in 2016, this policy allows for the accumulation of credits in kilowatt-hours for surplus power generated by self-generation facilities, up to 25% of annual or semi-annual historic consumption.
• Distributed Generation Strategy: The government approved a national distributed generation (DG) strategy in January 2022, aimed at expanding solar energy production, especially in regions with high solar irradiance, like Chiriquí and Veraguas.
• New incentives for solar energy investment: On January 1, 2024, Panama introduced enhanced incentives for solar energy investment through Law 417, which amends Law 37 of 2013. This updated legislation expands the incentive framework for the solar power sector by offering tax exemptions and import duty relief for all individuals and entities engaged in the industry.

These initiatives are part of Panama’s broader National Energy Plan 2015-2050, which targets 70% of installed generation capacity from renewable sources by 2050. The government is also fostering the growth of local solar production and reducing reliance on imported equipment.

Following are the notable solar projects in Panama:²⁴²⁵²⁶

Baco solar

• Capacity: 25.9 MW
• Location: Distrito Barú, Chiriquí, Panama

Esperanza

• Capacity:  90 MW
• Location: Esperanza, Valverde, Dominican Republic

Madre Vieja Solar Project (Under Construction)

The Madre Vieja solar project is located in Panama’s Municipality of Progreso, Barú district, Chiriquí province, near the east coast. Spanning about 33 hectares, the project is set to have an installed capacity of 31 megawatts and will utilize around 70,000 solar panels. This development marks EGP’s tenth solar plant in Panama, further establishing the company as the top renewable energy operator in Central America.

Here are some notable solar companies in Panama:²⁷

• Florida Electric & Solar – Specializes in solar power systems and services, with a focus on residential and commercial installations.
• Suncor Solar – Known for offering solar energy solutions and installations, with a strong emphasis on sustainable energy practices.
• All Pros Solar – Provides a range of solar solutions, including system design, installation, and maintenance for various applications.
• Sundew Solar – Focuses on delivering innovative solar technology and solutions for different energy needs.
• Panama Renewable Solutions: Specializing in Monocrystalline Solar Panels and Solar PV Panels, the company offers a comprehensive range of products catering to both residential and commercial needs.

These companies are involved in advancing solar energy adoption in Panama through their various services and solutions.