There are three ways to go solar in Colombia, and not all of them suit you.
Here you'll see how each one works, what you gain, what you give up, and when the right answer is to do nothing.
6-minute read · Written by the Circular Urban team
First: where what you pay comes from
Your bill doesn't just pay for energy. It pays for six things, and the biggest one, the energy itself, is also the one that moves the most.
Your bill, inside
Generation~37%Moves with the rain
The energy itself, bought on the wholesale market or by contract. Its price goes up when reservoirs run low.
Distribution~32%
The local networks that carry the energy to your meter.
Retail service~12%
The company that meters you, bills you and manages your contract.
Transmission~8%
The national high-voltage grid that moves energy between regions.
Losses~8%
Energy lost along the way, shared out among all users.
Restrictions~3%
Extra costs of running the system when the grid can't use the cheapest generation.
Approximate share of each component. It varies by network operator, market and socioeconomic stratum, and changes month to month.
+23%
is how much electricity prices rose in April 2024, in a single month, with El Niño and low reservoirs.
2%13%
of the country's installed capacity is self-generation: that's how much it grew between 2023 and 2026.
That's why producing energy close to where it's used stopped being an environmental curiosity and became a cost decision.
The three ways to go solar
The same questions for all three, in the same order, so you can compare them at a glance.
Which one is for you?
Answer and we'll mark the option that fits you best.
Buy the system
You pay for the panels, the inverter and the installation. The equipment is yours from day one.
- Upfront cost
- You cover it
- Work on your property
- Yes
- Maintenance
- On you
- Commitment
- None: the equipment is yours
- You keep all the energy it produces and the tax incentives.
- You pay the full cost upfront and take on the maintenance and the equipment's risk for 25 years.
Who it's for: You have the capital available and want the asset on your balance sheet.
Power purchase agreement (PPA)
A third party finances, installs and runs the plant on your property. You buy its energy for 10 to 20 years.
- Upfront cost
- None
- Work on your property
- Yes
- Maintenance
- The operator's
- Commitment
- 10- to 20-year contract
- No upfront cost, no maintenance to deal with, and your price per kWh is locked in.
- You commit for many years, and the first ones aren't necessarily the cheapest.
Who it's for: Your usage is high and steady, and you'll be in the same place for a decade or more.
Comunidad Energética (Energy Community)
You team up with other users and link your bill to a nearby solar farm. You don't install anything.
- Upfront cost
- None
- Work on your property
- No
- Maintenance
- The farm's
- Commitment
- Whatever the agreement says
- You join with no construction and no upfront cost, and you keep your same electricity retailer.
- The discount depends on how the Energy Community fills up and on the regime that applies to surplus energy.
Who it's for: Your usage is a household's or a small business's, or you don't have your own roof or land.
When it's not for you
We'd rather tell you here than after three meetings.
Your time horizon is short
Two or three years isn't enough: these contracts pay off in the second decade, not the first.
You don't control the roof
If you rent the space, the decision to build isn't yours.
Your usage is low and irregular
The system is sized to your real usage, and there wouldn't be much to replace.
You're looking for quick returns
This lowers an operating cost. It isn't a short-term financial product.
The words you'll hear
Seven terms that show up in any solar proposal, explained without the jargon.
PPA
Power purchase agreement. You buy a plant's energy at an agreed price, for years, without buying the plant.
Self-generation
Producing energy for your own use. If you have some left over, it goes to the grid.
Surplus energy
The energy you produce and don't use. It goes up to the grid and is settled on your bill under Resolución CREG 174 de 2021.
Comunidad Energética (Energy Community)
A group of users who team up to produce energy together. It was created by Ley 2294 de 2023 (Law 2294 of 2023) and regulated by Decreto 2236.
kWp
Kilowatt peak: a solar system's capacity under ideal conditions. A large retail space usually has about 33.8 kWp.
Wholesale energy market (bolsa)
The market where the energy that gets generated is bought and sold. Its price drives part of your bill.
SPV
Special purpose vehicle: a company set up only to own the project and its contracts, separate from the rest of the business.
