The Way Forward for Renewable Energy in Central America

The report analyzes the energy landscape of Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama, noting a growing dependence on imported fossil fuels despite significant renewable potential. It highlights that while the region leads in hydropower and geothermal energy, resources like wind and solar remain underutilized. The document identifies critical gaps in resource data, socioeconomic assessments, and administrative efficiency, while recommending a 'long, loud, and legal' policy approach to attract investment and achieve a 100 percent renewable electricity grid.

• Central America has the technical potential to meet 100 percent of its electricity needs with renewable energy, with geothermal potential alone estimated at more than 20 times the current installed capacity.
• The region is experiencing a growing dependence on imported fossil fuels, which accounted for 45 percent of primary energy use and 70 percent of secondary energy use.
• Hydropower is the dominant renewable source, providing 49 percent of electricity generation in 2011, though there is increasing resistance to large-scale dams due to social and environmental impacts.
• Wind and solar resources are significantly underutilized; existing wind installations use less than 1 percent of available resource potential, and solar radiation is 2-3 times higher than in world leaders like Germany and Italy.
• Traditional biomass, specifically fuelwood for cooking, remains a major energy source, accounting for 38 percent of total final energy use and 82 percent of residential primary energy consumption.
• Fossil fuel-based electricity generation is more expensive than renewables when externalities are included; health and climate costs would increase the real cost of fossil fuel plants by 8 to 10.6 percent through 2020.
• Approximately 7 million people in Central America have limited or no access to electricity, making distributed renewable energy the most viable solution for remote communities.
• Investment in renewables is hindered by bureaucratic inefficiency, lack of bank capacity to understand renewable value propositions, and a lack of transparency in permitting processes.
• While most Central American countries have renewable energy targets, these visions often lack concrete measures, obligations, and mandatory requirements, often competing with fossil fuel subsidies.
• Electricity loss is a significant issue, particularly in Nicaragua (over 25 percent) and Honduras (nearly 24 percent), primarily due to lack of investment in grid maintenance.

APA

Dolezal, A., Majano, A. M., Ochs, A., & Palencia, R. (2013). The Way Forward for Renewable Energy in Central America. Climate and Development Knowledge Network. https://cdkn.org/sites/default/files/files/The-Way-Forward-for-Renewable-Energy-in-Central-America_english_FINAL.pdf

Chicago

Dolezal, Adam, Ana Maria Majano, Alexander Ochs, and Ramon Palencia. The Way Forward for Renewable Energy in Central America. Climate and Development Knowledge Network, 2013. https://cdkn.org/sites/default/files/files/The-Way-Forward-for-Renewable-Energy-in-Central-America_english_FINAL.pdf.

Wikipedia

{{cite report |last1=Dolezal |first1=Adam |last2=Majano |first2=Ana Maria |last3=Ochs |first3=Alexander |last4=Palencia |first4=Ramon |title=The Way Forward for Renewable Energy in Central America |publisher=Climate and Development Knowledge Network |date=June 2013 |url=https://cdkn.org/sites/default/files/files/The-Way-Forward-for-Renewable-Energy-in-Central-America_english_FINAL.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dolezal2013way, author = {Dolezal, Adam and Majano, Ana Maria and Ochs, Alexander and Palencia, Ramon}, title = {{The Way Forward for Renewable Energy in Central America}}, institution = {Climate and Development Knowledge Network}, year = {2013}, month = jun, url = {https://cdkn.org/sites/default/files/files/The-Way-Forward-for-Renewable-Energy-in-Central-America_english_FINAL.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }