Panama has managed to consolidate one of the cleanest energy matrices in the region, with more than 80% renewable generation in years of normal hydrology .
Hydropower remains the foundation, but in the last decade solar and wind technologies have gained a key place within the system, going from representing less than 5% to more than 15% of national generation .
As of 2024, Panama maintains an electricity matrix with more than 80% renewable generation in years of normal hydrology, detailed Carlos Boya , Scientific Researcher at the Specialized Higher Technical Institute (ITSE) .
This progress, he emphasizes, was achieved thanks to the sustained growth of new clean energy sources, among which solar and wind power stand out.
The installed capacity of wind power already exceeds 500 MW , concentrated mainly in provinces such as Coclé and Penonomé.
For its part, photovoltaic solar energy is around 600 MW , and has spread in a decentralized manner throughout the country, both on a large scale and in distributed generation projects.
Among the technologies with the greatest growth potential, Boya highlights solar as the most dynamic source with solid projections.
Solar energy is experiencing the fastest growth and will continue to lead the renewable energy expansion, he assured.
In 2024, installed capacity had already exceeded 700 MW , a figure driven by competitive conditions, resource availability and speed in the installation of projects.
Although there is still hydroelectric potential in underutilized basins such as Bocas del Toro and room to expand wind power in regions like Veraguas, solar power is emerging as the central technology of Panama's energy transition.
The structural brake: an outdated regulatory framework
Despite the progress, renewable growth faces a clear limit: the regulatory framework.
The main obstacle to the expansion of renewables and the development of a more dynamic and democratic energy market in Panama is the regulatory framework, Boya argued.
In his view, the financial and technical challenges can only be resolved once the legal framework governing the sector is modernized.
Law 6 of 1997 , still in force, establishes a rigid market that does not allow hourly rates, participation of aggregators or bidirectional flows .
This seriously limits the development of storage projects, distributed generation and the figure of the prosumer , elements that are central to modern electrical systems.
In addition, Panama faces a considerable technical gap: the low level of digitization of its electricity grid .
This prevents the application of flexible demand strategies, increases the risks of overloads, and makes it more difficult to manage the variability of renewable energies, especially solar.
"If we don't move towards a profound modernization, we run the risk of remaining stuck in an 'energy industry 3.0', while the world is already moving towards industry 5.0," Boya warns.
This lag could have direct consequences on the country's competitiveness and its ability to attract high value-added investments, such as the semiconductor industry.
Despite the progress made, the warning is clear: without a comprehensive reform of the regulatory framework and investment in digitalization , Panama could jeopardize its leadership in clean energy. The world is already moving towards Industry 5.0 , the researcher concludes, highlighting the urgency of adapting the energy system to the innovation standards demanded by today's global market.