Battery Energy Storage in Homes: Panama Lags Behind the World

2026-03-16 - 03:26

While the world is accelerating the incorporation of batteries to store energy and support the expansion of renewable sources, in Panama that technology is advancing at two speeds. On the one hand, it is growing strongly in homes, businesses, hotels and isolated projects, driven by falling prices and the need for a more stable supply. On the other hand, in the large-scale electricity generation segment, the country is still awaiting detailed regulations that will allow it to clear up technical, commercial, and operational gaps that hinder new investments. The gap is significant: the International Energy Agency warned in 2024 that energy storage will need to increase six fold by 2030 for the world to triple its renewable capacity, and pointed to batteries as the dominant technology in that expansion. The contrast in Panama is explained by the fact that regulatory steps already exist for some uses, but not for all. In 2024, the National Authority of Public Services (ASEP) approved a procedure to incorporate battery storage systems into the main transmission system and another for end customers with critical loads. The regulations approved by ASEP allow battery storage systems to be connected to the main transmission grid to support the operation of the electrical system. These systems allow energy to be stored during periods of low demand or high generation and released when the system needs it. Furthermore, the regulation recognizes the use of these batteries as a tool to improve grid stability and facilitate the integration of renewable sources, by providing rapid support in the face of variations in electricity supply or demand. In other words, the most sensitive level of detail is still missing in generation: the operating regulations and methodologies that will define how these batteries participate, how their contribution is calculated, how they are remunerated, and what guarantees investors will have. That gap was exposed two years ago. In April 2024, ASEP approved changes to the wholesale market trading rules to allow, as a first step, battery storage systems to complement the calculation of firm power in renewable energy plants. But the resolution itself made it clear that after that adjustment, an update of the operating regulations and the corresponding methodologies was necessary to detail remuneration, technical requirements, calculation elements, and conditions of participation. Even during the prior public consultation, companies in the sector warned that without those details the investor would assume a high risk when bidding. The lack of clarity wasn’t merely theoretical. It ended up impacting an electricity tender. In July 2024, the long-term power and energy procurement process initiated by the previous administration was suspended after it was concluded that the bidding documents were not clear enough to guarantee effective competition, transparency for investors, or better prices for customers. Reports published at the time indicated that among the observations made by interested companies were precisely the specifications of the battery storage system and other changes requested by ASEP. Two years later, the issue is still under development. National Energy Secretary Rodrigo Rodríguez maintains that Panama’s policy is to introduce energy storage, but “in an orderly manner.” He explained that regulations already exist for distribution, transmission, and some areas of generation, but acknowledged that this is not enough for generation. “We need to look at the regulations in detail, which are called operating rules and methodologies,” he said. He added that this work is being carried out by the National Dispatch Center and the Energy Policy Commission, and that the Ministry’s goal is for the country to be able to hold a renewable energy tender with storage by 2028. His central message was that storage is indeed important, but with clear rules that provide certainty for investment. Along the same lines, Rodríguez admitted that those details are still lacking. “It’s not that they’re unclear, they simply don’t exist,” he stated when asked what was needed for the scheme to be viable. Their expectation is that these items will be released between this year and the middle of next year, so that a tender can then be structured. The statement confirms that Panama is not debating whether or not storage should be introduced, but remains stuck on how to implement it in the fine-tuning of the electricity market regulations. From the private sector, the interpretation is that the country is falling behind in an area where the rest of the market has already moved forward. Rafael Jaén Williamson, president of the energy commission of Apede, believes that this is a technology that should already be implemented with a more clearly defined strategy. In his opinion, this is not a novelty, but a tool that the Panamanian electrical system will inevitably have to incorporate, especially to accompany the growth of non-conventional renewable sources. “Legislation must keep pace with this movement,” he summarized. He also cautioned that, as has happened in many countries, private investment often moves faster than the capacity to legislate and regulate. Upward Trend But while the regulatory front for power generation is lagging, deployment is already underway in the residential and commercial markets. Manuel Jiménez, regional energy manager at Casa de las Baterías, states that the boom of the last five years is mainly due to price. He explains that lead-acid batteries, with lower energy density and high costs, were previously predominant. With the expansion of lithium batteries, and in particular lithium iron phosphate batteries, the landscape changed. In Panama, the use of batteries in homes is still limited, but in some businesses it already exceeds 10% of installed solar systems, according to industry estimates. Solar projects with batteries can recoup their investment in around four to five years, compared to the eight years it took less than a decade ago.