1. Executive Summary

Colombia’s solar sector is on the rise, propelled by high electricity costs, favorable tax incentives, and growing consumer demand. Government policy has enabled rooftop and utility-scale expansion, yet delays in permitting, corruption, and regulatory uncertainty persist. Companies like Atlas Renewable Energy, Colombia Solar, and Emergent are leading development efforts but call for urgent reform. This report outlines Colombia’s path forward, incorporating insights from project developers, consultants, and regulatory sources.

 

2. Introduction

Colombia is endowed with high solar irradiance (4.5–6.5 kWh/m²/day), placing it among Latin America’s most promising markets for photovoltaic (PV) deployment. Yet as of 2024, solar comprises only a small portion of the national electricity mix, long dominated by hydropower (≈65%) [8.2].

 

3. Colombia’s Energy Matrix: Context and Need for Diversification

Hydropower has historically provided stability but now represents a risk under intensifying El Niño patterns. The National Development Plan 2022–2026 and Colombia’s revised Nationally Determined Contributions (NDCs) aim to diversify this matrix, prioritizing renewables like solar and wind to meet decarbonization targets [8.3, 8.6].

 

4. Current State of the Solar Energy Market

Solar capacity has grown significantly, surpassing 1.5 GW in 2024, thanks to tax incentives (Law 1715/2014 and Law 2099/2021) and net metering regulations [9]. Companies like Atlas Renewable Energy and Colombia Solar are building projects ranging from 1 to 100+ MW. According to Santiago Ortega (Emergent), internal rate of return (IRR) for solar ranges from 25% (residential) to 60% (industrial), driven by high energy costs—often exceeding $0.30/kWh [Ortega, Interview].

Emergent projects 7 GW of rooftop solar by 2030, primarily in the commercial and industrial sectors [Ortega, Interview].

 

5. Regulatory and Policy Framework

Colombia has a robust legislative foundation:

• Law 1715 of 2014: Tax deductions, VAT and tariff exemptions for renewables [9]
   

• Law 2099 of 2021: 50% investment deduction over 15 years [9]
   

• Law 2294 (PND 2022–2026): Sets energy diversification and emissions reduction goals [8.3]
   

However, all three interviewees—Rubén Borja (Atlas) [7], Charlie Lopez Guirado (Colombia Solar) [User Summary], and Santiago Ortega (Emergent) [User Summary]—highlight grid connection delays, regulatory instability, and an inactive regulatory commission (CREG) as major risks for investors.

 

6. Investment Landscape and Key Players​

Atlas Renewable Energy

Atlas Renewable Energy, backed by Global Infrastructure Partners (GIP), launched its first Colombian solar venture—the Shangri‑La PV project—with a capacity of 201 MWp, expected to generate ~403.7 GWh/year and power 214,000 homes by late 2025. The project was financed through a COP 473.8 billion (~USD 113 M) loan from IDB Invest and Bancolombia, and involves a PPA with Isagen. This investment complements Atlas’s objective of achieving 1 GW of Solar capacity in Colombia renewablesnow.com+6atlasrenewableenergy.com+6idbinvest.org+6.

 

Colombia Solar

Founded in 2015, Colombia Solar specializes in grid-tied projects ranging from 1–20 MW, primarily with foreign investors. Despite strong consumer interest and solid returns, the company faces setbacks due to bureaucratic grid-connection delays—only 5 of 220 projects were approved recently—and corruption at various government levels .

 

Emergent

Emergent, led by Santiago Ortega, operates across environmental consulting, solar project development, software, and e-commerce. The firm reports estimated IRRs of 25–60%, thanks to generous energy tariffs, net metering, and tech cost declines. Emergent projects 7 GW of rooftop solar by 2030, predominately in industrial and commercial sectors .

 

SunColombia

Focused on distributed generation for rural and underserved regions (ZNI), SunColombia has become a leading rural solar developer. Its model includes community partnerships and NGO collaboration. While not yet widely covered in mainstream publications, the company is recognized in policy circles for its social impact approach .

 

Enel Green Power

The renewable division of Enel is deploying major utility-scale solar farms—such as the 486 MW Guayepo and 187 MW El Paso parks—alongside its existing wind portfolio. Enel’s strategy integrates clean energy production with modern grid infrastructure to support national decarbonization targets es.wikipedia.org.

 

Celsia

A subsidiary of Grupo Argos, Celsia is scaling urban distributed solar and pioneering energy storage. Notably, in December 2024, Celsia commissioned Colombia’s first solar+storage system: a 1 MW/2 MWh LiFePO₄ BESS at Palmira 2 PV farm. The company also launched significant rooftop solar projects in Yumbo and Santa Rosa de Lima ess-news.com.

 

Additional Observations & Market Context

• Regulatory advancements like Law 1715 (2014), net metering (2018), and Law 2099 (2021) established tax benefits, VAT exemptions, and attractive depreciation for solar developers cuatrecasas.com+7d-nb.info+7practiceguides.chambers.com+7.
   

• As of early 2025, solar capacity in Colombia reached approximately 2 GW, representing about 10% of the national renewable mix—six times the level of hydropower capacities outside large hydro es.wikipedia.org.
   

7. Challenges and Barriers

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8. Case Study: Atlas Renewable Energy in Colombia

Atlas developed the Shangri-La project, contributing 403 GWh/year—enough to power 214,000 homes. Its success relied on long-term foreign financing and partnerships with local utility Isagen. The company plans to develop 1,000 MW of solar in Colombia [7].

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9. Distributed Generation and Electrification of Remote Areas

Distributed generation (DG) is increasingly seen as a solution for regions like La Guajira and the Amazon, where grid access is poor. Emergent and Colombia Solar both report a shift toward rooftop and off-grid systems, encouraged by:

• Net metering (2018)

• Accelerated depreciation

• High returns on self-consumption projects [Ortega, Colombia Solar]
   

Battery storage is becoming critical in unreliable grid zones but still lacks the legal and market clarity needed for scale [Ortega].

 

10. Environmental and Social Considerations

Permitting processes must comply with consulta previa regulations in territories inhabited by indigenous and Afro-descendant communities. Projects have been delayed due to lack of stakeholder engagement and perceived environmental risks [7, 9].

New regulatory updates are also boosting run-of-river hydro projects, expanding the scope of tax-exempt renewable investments beyond solar [Ortega].

 

11. Future Outlook and Opportunities

The sector’s future is optimistic but conditional:

• 7 GW of rooftop solar projected by 2030 [Ortega]

• Interest from major companies like Ecopetrol in solar acquisitions signals mainstream adoption [Colombia Solar]

• Battery storage and green hydrogen could emerge as new growth areas—pending supportive policy [8.6, Ortega]
   

 

12. Recommendations

1. Appoint full leadership at CREG and issue clear regulatory guidelines for energy storage.

2. Streamline project approval timelines via centralized digital platforms.

3. Expand transmission infrastructure, particularly in the north.

4. Develop financial products to unlock residential solar investment.

5. Combat corruption through process transparency and third-party audits.

6. Incentivize storage systems with hourly tariffs and financing mechanisms.
    

 

13. References

1. Rubén Borja, Interview – Energy Pioneer, April 2024 [7], [9]
    

2. Otto Gunderson & Charlie Lopez Guirado, Interview Summary – Colombia Solar, 2024
    

3. Santiago Ortega, Interview Summary – Emergent, 2024
    

4. OECD. Distributed Renewable Energy in Colombia, 2023 [8.10]
    

5. IEA. Colombia Energy Policy Review, 2023 [8.2]
    

6. UNDP. Colombia’s Revised NDC and Climate Promise [8.6]
    

7. National Development Plan 2022–2026 (Law 2294/2023) [8.3]
    

8. Law 1715 (2014) and Law 2099 (2021) [9]
    

9. https://www.theenergypioneer.com/post/colombia-s-utility-pv-potential [8.1]
    

10. https://www.netzerocircle.org/articles/a-200-million-solar-park-marks-a-new-era-for-colombias-renewable-sector [8.4]
     

https://forbes.co/2023/05/19/emprendedores/suncolombia [8.9]