Panama Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in panama, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Energy Sector
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Panama’s energy sector is transitioning from a historical reliance on oil towards a more sustainable mix, prominently featuring hydroelectric power and a growing contribution from solar and wind energy, driven by government initiatives and the goal of increased renewable integration by 2050; despite challenges related to climate change impacts on hydropower, grid stability with variable renewables, rural electrification, and regulatory adaptation, the country’s strategic location, government support, and infrastructure development, including its participation in the SIEPAC regional grid, position it for continued growth in renewable energy while addressing energy security and environmental considerations.

Opportunities

Panama’s energy sector presents several promising opportunities for investment and development, driven by increasing demand, government goals for renewable energy expansion, and a strategic position in the region: 

Renewable Energy Development

o    Solar Energy: With abundant sunshine, Panama offers significant potential for solar energy projects. Recent laws provide tax incentives and exemptions for solar equipment and projects, making it an attractive area for investment. Various scales of projects are viable, from utility-scale solar farms to commercial and residential installations.   
o    Wind Energy: Panama has already seen successful wind farm developments like the Penonome Wind Farm. The government offers incentives for wind power generation equipment manufacturers and installers, including tax exemptions. Further development of wind resources is encouraged.   
o    Hydroelectric Power: While already a significant contributor, there may be opportunities for new small to medium-scale hydroelectric projects, which also benefit from tax advantages and simplified market access. Upgrading existing infrastructure for efficiency could also be an area.   
o    Biomass and Biofuels: Legislation supports the development of biofuels and electricity generation from biomass, including tax incentives and the use of biogas and bioethanol. Opportunities exist in utilizing agricultural waste and other organic materials.   
o    Geothermal and Ocean Energy: While less developed, there may be future opportunities to explore Panama’s geothermal potential in volcanic regions and to harness ocean energy resources.
Overall, Panama’s commitment to diversifying its energy mix, its attractive investment climate, and its strategic position in a growing region create a dynamic and promising landscape for energy sector opportunities. Recent government initiatives, including renewable energy tenders and incentives, signal a continued push towards a more sustainable and secure energy future.   

Web Resources

•    Secretaría de Energía de Panamá
•    Autoridad Nacional de los Servicios Públicos
•    ETESA 
 

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