Honduras Will Easily Achieve Its Renewable Energy Targets Through Solar and Hydro Development
Honduras set a goal to have renewable energy generate 60% of its power by 2022 and 80% by 2034. With 5,435 GWh renewable energy generation, the 60% goal was actually already achieved in 2017. Hydro is the largest share, accounting for one-third of the country’s power, followed by solar at just over 10%.
Solar Energy in Honduras Exceeds Other Major Economies
Honduras has the largest solar share generation in the world at 10%, followed by Italy with 7.6%, Greece with 7.4 %, Germany with 5.9% and Japan with 4.8%. This is exceptional when compared to the global solar share of 0.04%. Also, it is remarkable taking into account the size of its economy and regional socio-political uncertainties. Honduras was the first non-island country to have more than 10% of its electricity from solar and it has the largest solar capacity in Central America.
Major Solar Projects Developed With More to Come
The first solar farms in Honduras were commissioned in 2015, three years after the energy reform was approved. Solar developments benefited from the Law of Renewable Energy (Decree 70 of 2007). It established Feed-in Tariffs (FiT) for clean energy projects in the first 15 years of operation. It also granted tax exemptions to renewable energy generators.
The major projects are Cinco Estrellas (61 MW), Choluteca I and II (50 MW each), Cohessa (50 MW), and Soposa (50 MW). We also expect four additional projects to be added over the next three years: Nacome I (21 MW), Helios (25MW), Lajas (11.9 MW), and Fray Lazaro (5 MW).
Honduras expects to continue with this growing photovoltaic trend. Developers not only benefit from regulations and fiscal incentives, but also receive support from financial institutions. Since 2012, the Inter-American Development Bank (IDB) has assisted in the technical and financial feasibility of photovoltaic projects.
Roughly 22 studies have been completed for new projects ranging from 40 kW to 3 MW of installed capacity. In March 2018, the Multilateral Investment Guarantee Agency (MIGA) granted US$56.7 million in guarantees to three photovoltaic projects.
Outlook Shines Bright for Developers
Honduras has made a great effort to adopt solar energy at large scale. Its success is due mainly to three combined factors: renewable energy policies, fiscal incentives, and support from international financial agencies. Over the next five years, we expect to see solar energy growth of roughly 10%-12% annually.
The positive fundamental backdrop for solar generation is also being supported by the lower costs of solar technology and the expertise Honduras has acquired from previous projects. Photovoltaic module prices have fallen more than 70% since 2010, and the availability of local photovoltaic manpower has reduced labor costs formerly associated with foreign temporary workers. We expect these trends to continue to drive solar penetration throughout Honduras.