The price of energy in Colombia
Where it's heading through 2050, and exactly what a solar contract locks in
In short
Projections say energy prices will rise. A solar contract freezes your price.
What matters isn't which one is cheaper today, but the year the two curves cross.
Wholesale energy market (bolsa), per kWh
2026
COP 250
2050
COP 766
Projected: rises year after year.
Solar contract, per kWh
COP 320
Fixed for 20 or 25 years.
The words, plainly
Six terms you'll see in the chart and in any conversation about the price of energy.
kWh
Kilowatt-hour: the unit energy is measured and billed in. It's what your meter counts.
Wholesale energy market (bolsa)
The market where the energy generated in Colombia is bought and sold. Its price goes up when the reservoirs run low.
PPA or solar contract
Power purchase agreement. You buy the energy from a solar plant at an agreed price, for years, without buying the plant.
Hedge
Protection against price rises, like insurance: your price doesn't depend on what the market does.
Firm energy
The energy the system can count on delivering no matter what. It's the energy that's running short.
XM
The company that operates Colombia's power system and runs the energy market. It publishes the deficit projections in this guide.
Two curves, one chart
The red one is the wholesale market; the blue one, your contract. Move the year and see which side your wallet lands on.
- Wholesale market: rises every year
- Solar contract: fixed at COP 320
- You pay more with the contract
- You pay less with the contract
In 2026 the wholesale market is at COP 250 per kWh and the contract at COP 320. That year you pay COP 70 more for each kWh.
See the data
| Year | Market (COP/kWh) | Solar PPA (COP/kWh) |
|---|---|---|
| 2026 | 250 | 320 |
| 2030 | 301 | 320 |
| 2034 | 363 | 320 |
| 2038 | 438 | 320 |
| 2042 | 527 | 320 |
| 2046 | 636 | 320 |
| 2050 | 766 | 320 |
What almost nobody tells you
In the first years, the contract isn't cheaper
Until 2032 the wholesale market costs less. You don't sign a PPA for the first year, but for the twenty that follow.
2026 to 2050, year by year
6 years
2026–2031: you pay a little more than on the market.
19 years
2032–2050: the market climbs past it and keeps rising; your price stays put.
That’s why these contracts are signed for 10, 15 or 20 years, not three. Think of it as a hedge against the price of energy, not an instant discount.
The chart measures only one part of your bill
It compares the generation price. Your rate also pays for networks, retail service, losses and grid constraints, so it's well above the wholesale market price. That gap works in the solar contract's favor, not against it.
- Generation: what the chart measures
- Networks, retail service and other charges
Why the curve rises
The country is going to use more energy than the system can reliably supply. XM calls that gap the firm energy deficit.
Firm energy deficit projected by XM
- 2025-1.6%
- 2026-2.0%
- 2027-3.5%
The longer the bar, the more energy falls short of what will be used.
This is what it feels like when the margin disappears: in April 2024, during El Niño, electricity prices rose about 23% in a single month.
Exactly what a solar contract locks in
Five things are written down from day one. You only pay for the energy you use.
Your price per kWh
Fixed or indexed, as agreed, for the whole term of the contract.
Who puts up the money
A special purpose vehicle (SPV), created only for the project, finances, builds and operates it. The asset stays off your balance sheet.
Who handles operations
The developer, for the whole term: maintenance, availability and performance.
What you don't use
It's delivered to the grid and settled as surplus energy under Resolución CREG 174 de 2021 (CREG Resolution 174 of 2021).
What happens at the end
The system becomes the property of the energy buyer.
What about your case?
About the chart, the contract or your numbers. No strings attached.
The solar projects we are structuring
At Circular Urban we structure projects under this model. These are the ones we have today in La Pintada, Antioquia.
Project in Structuring
Project in StructuringLearn more about the business model and how you can take part
We'll answer your questions on a call.
This conversation is informational, about how the project is structured. It is not financial, legal or tax advice, nor a public offering of securities. Every participation carries risk.
Market figures 2023–2026: UPME (self-generation and distributed generation registry), XM (firm-energy projections), Mordor Intelligence, SER Colombia, Stockholm Environment Institute and local business press. The regulations cited were checked against the official text of each one.
This content is informational, about how the projects and the Colombian energy market are structured. It is not financial, legal or tax advice, nor a public offering of securities. The savings shown are reference estimates, and each project's results are subject to its performance.