How Solar Financing Works in Colombia: A 2026 Guide
The problem solar financing solves
A typical residential solar installation in Colombia costs between $5,000 and $15,000 USD. A commercial rooftop system can run $30,000 to $200,000. Most Colombian households and businesses can't, or won't, pay that upfront, even when the long-term savings are obvious.
Financing removes the upfront payment. The customer pays a monthly amount that's lower than their current electricity bill instead of buying the system outright. The financing company provides the capital and is repaid from those monthly payments, and the customer saves money from day one.
The model has been used in other markets for years. What's new is that the economics now work in Colombia, and in several respects they work better here than in the U.S.
Why the economics work in Colombia
Three structural conditions make solar financing attractive in Colombia.
1. Electricity prices are high and rising
Colombia's average electricity price reached approximately $227/MWh in 2024, up 38% from 2023. Residential rates sit at roughly 884 COP/kWh, 134% of the world average. Colombia depends on hydroelectric generation, which is exposed to El Nino droughts. Its thermal backup plants are aging and run on imported fuels, and legacy subsidies are being phased out. All three push prices up.
For a solar lender, high grid prices mean wider margins. The business model is the spread between what solar generation costs and what grid electricity costs, and Colombia's spread is among the widest in Latin America.
2. Solar irradiance is excellent
Most of Colombia receives average solar irradiation of 4.5-5.5 kWh/m2/day, and the Caribbean coast and eastern plains exceed 5.5 kWh/m2/day. More sun means more energy per installed kilowatt, which improves the economics of every financed system.
3. Labor and installation costs are low
Installation labor in Colombia runs 60-70% below equivalent U.S. markets. Panels are competitively priced too, since Colombia imports mainly from China with relatively low tariff barriers. The all-in cost per installed watt is substantially lower than in developed markets, so each project needs less capital and pays back faster.
The three main financing models
Solar loans
The customer borrows to pay for the installation. They own the system from day one, receive all tax benefits, and make monthly loan payments set below their previous electricity bill.
How it works:
- A financing company provides capital for the installation
- The customer makes fixed monthly payments over 3-7 years
- The monthly payment is set below the customer's current electricity cost, so they save money immediately
- Once the loan is paid off, the customer owns the system outright, and their electricity is close to free for the remaining 15-20 years of system life
Typical terms in Colombia (2026):
- Loan amounts: $5,000 - $200,000 USD equivalent
- Tenors: 3-7 years
- Interest rates: 18-22% COP (reflecting Colombian market rates)
- Customer savings: 15-30% below current electricity costs from month one
Power purchase agreements (PPAs)
The financing company owns and operates the solar system on the customer's property, and the customer buys the electricity at a fixed rate below the grid price.
How it works:
- The customer pays nothing upfront and takes on no loan; they only buy cheaper electricity
- PPA rates are typically set 10-20% below current grid tariffs
- Contract terms run 10-20 years
- The financing company handles all maintenance and performance guarantees
In Colombia, PPAs are more common for commercial and industrial installations, where systems are larger and the counterparty credit is stronger.
Leases
A lease works like a PPA, except the customer pays a fixed monthly amount for the system instead of paying per kilowatt-hour. Leases are less common in Colombia today, though their use is growing.
What changed in 2025: energy communities
In April 2025, Colombia's energy regulator CREG issued Resolution 101 072, which set up a legal framework for comunidades energeticas (energy communities). The regulation created two new entity types. In an AGRC (collective self-generation), a group of users shares a physical generation asset and feeds surplus into the grid. In a GDC (collective distributed generation), users are aggregated virtually through the local distribution network and don't need a physical connection to the generation source.
Over 18,000 communities have applied to participate, and 285 had been selected for implementation as of early 2026.
This matters a great deal for solar financing because individual rooftop installations can now be legally bundled into portfolio-level assets. A lender or investor looks at a community of 200 households with collective generation rights very differently from 200 separate contracts. That regulatory change is what makes solar financing at scale viable in Colombia.
Who qualifies for solar financing in Colombia
Residential
- Homeowners (not renters) with suitable roof conditions
- Monthly electricity bills above approximately 200,000 COP ($54 USD)
- Stable income documentation
- Located in areas where net metering is available
Commercial and industrial
- Businesses with monthly electricity costs above 1,000,000 COP ($270 USD)
- Roof or ground-mount space available
- Minimum 3-year lease on the property (for non-owners)
- Creditworthy counterparty
What disqualifies
- Roofs with structural weight limits (this affects approximately 70% of older Colombian residential buildings, though new flexible panel technologies are addressing it)
- Properties in stratum 1-2 with subsidized electricity rates (the spread is too narrow for financing to work)
- Buildings heavily shaded by adjacent structures
The math: a real example
Scenario: a commercial building in Bogota
- Current monthly electricity cost: 5,000,000 COP ($1,350 USD)
- System size: 30 kWp
- Installation cost: $25,000 USD equivalent
- Financing: 5-year solar loan at 20% COP interest
Results:
- Monthly payment: approximately 3,800,000 COP ($1,027 USD)
- Monthly savings: approximately 1,200,000 COP ($324 USD), a 24% reduction from day one
- After year 5: the system is paid off, and electricity cost drops to near zero (maintenance only)
- 25-year savings: approximately $350,000 USD
The numbers shift with location, system size, and tariff stratum, but in most scenarios the customer saves money immediately and pays nothing upfront.
How Nuentero fits in
Nuentero is software for the full solar project ecosystem, from planning and underwriting through capitalization and execution. We don't install systems. Our purpose is to accelerate the green transition, and we do that by making sure the parties to a project deal in good faith and that the project is executed profitably. Through our partnership with 2050LATAM, we connect international capital with Colombian solar deployment. Investors see each project's generation and portfolio performance in the Nuentero dashboard.
If you're a homeowner or business in Colombia interested in solar financing, or an investor looking at Colombian solar as an asset class, contact us at john.crye@nuentero.com.
Nuentero builds software for solar projects across Colombia, from planning through execution. Explore our investor dashboard or contact us to learn more.