Honduras Emerges as Central America’s Solar Success Story

The country is attracting top solar developers and manufacturers.

energia_solar_hondurasHonduras is emerging as Central America’s solar success story, thanks to an ahead-of-the-curve incentive plan that has brought foreign investment to the sector, anchored by guaranteed 20-year contracts with state utility ENEE.

The country will overtake Mexico as Latin America’s second-largest solar market after Chile in 2015, according to GTM Research’s latest Latin America PV Playbook, as regulator Central America Regional Power Interconnection Commission continues its fast-track project approvals.

Regulatory clarity and incentives for investors have set the country apart from its neighbors El Salvador and Nicaragua, where a lack of clear rules and price stability are hindering solar development.

Solar growth in Honduras has been fast, with the country’s first large-scale PV project — the 144-megawatt Nacaome park operated by Compañía Hondureña de Energía Solar and Solar Power — having only initiated operations in May.

But the sudden growth spurt is the result of a decade-long push by the government to open up generation and distribution to foreign investment and diversify the country’s energy mix, long dominated by thermal and hydroelectric.

In 2007 Honduras enacted a law to promote renewable energy generation, with 20-year income tax breaks and a waiving of import tariffs on renewables components, while also requiring ENEE to enter into 20-year PPAs with renewable energy firms.

And in 2013 the government launched its premium tariff of $155 per megawatt-hour for the first 300 megawatts of PV capacity brought on-line by July 31 of this year.

Since then, CRIE has approved more than 600 megawatts of solar projects.

SunEdison is the biggest company operating in Honduras so far, having built three solar projects totaling 81.7 megawatts that came on-line in July, funded by a $146 million non-recourse debt arrangement with the International Finance Corporation, the Central American Bank for Economic

Integration and the OPEC Fund for International Development.

The complex features the two 23.3-megawatt Pacífico and Choluteca I plants, as well as the 35.1-megawatt Choluteca II.

Six other projects are under construction in the region and neighboring department Valle, totaling 250 megawatts, all of which are slated to come on-line this year.

Source | http://www.greentechmedia.com

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