In 2003, Guatemala approved the Incentives Law for Renewable Energies Generation.

In 2005 tax incentives were established for 10 years, with import taxes payment exemption for equipment, components and accessories related to projects of electric power generation from renewable sources.

In 2010, the PEG-1 Indicative Expansion Plan for Generation System was launched as part of the energy matrix transformation, with the objective of at least 60% of energy being produced through renewable resources by 2022.

Guatemala conducts auctions to award electricity and energy production contracts, in which renewable energy may have a specific quota or compete with other technologies.

Since 2012, the CNEE has held bids to hire power.

Distribution companies are the off takers.

The first tender awarded a total of 393 MW to hydroelectric (221 MW), wind (101 MW), solar (55 MW) and biomass (16 MW) plants with 15-year power purchase contracts.

The second tender, in 2014, aimed at contracting 250 MW. The auction hired 322 MW and renewable energy (solar, biomass and small hydro) were awarded 116 MW.

Auctions have been the main driver of renewable energy investment in the country.

With a total of U$D 702 million 2014 was a record year of clean energy (biomass, solar, hydroelectric and wind power plants) investment.

In 2015, the first auctioned projects began to connect to the grid.

Two large-scale photovoltaic plants (30 MW and 50 MW) were connected.

Investments declined markedly in 2015, when only the solar sector received a total of U$D 66 million.

Guatemala is the second Central American energy market, with a total generation capacity of 3.7 GW.

In 2015 it generated 10.3 TWh of electricity; of which 46% came from fossil fuel-based generation, 26% from hydroelectric and 28% from renewable energies.

Net metering distributed generation is allowed in the country.

In December 2015, 1,274 prosumers with a total installed capacity of 7.4 MW were connected to the grid.

The energy market in Guatemala has state and private actors operating in generation, transmission, trade and energy distribution segments.

The Ministry of Energy and Mines oversees electricity sector planning, while the National Electricity Commission (CNEE) is in charge of regulation. The Wholesale Market Operator organizes the system dispatch based on marginal cost of generation.

Guatemala is connected through the Central American Electric Integration System (SIEPAC) to Honduras and El Salvador, and northern Guatemala is also connected to Mexico´s transmission system.

The renewable energies installed capacity of Guatemala increased 38%, reaching 1 GW in December 2015.

The country’s average retail electricity prices fell 21% from U$D 228 / MWh in 2014 to U$D 181 / MWh in 2015.

In 2017 Guatemala is preparing a 420 MW tender for a 15-years period.

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