What Happened
Panama is seeing rapid uptake of battery storage at the residential and commercial level while national rules for large-scale generation and market participation remain incomplete. Regulators have adopted initial procedures to allow battery systems to connect to the transmission grid and to support critical end-users, but detailed operating rules and remuneration methodologies for generation-scale storage are still missing.
Regulatory Gap
In 2024 the National Authority of Public Services (ASEP) approved procedures to integrate battery storage into the main transmission system and for customers with critical loads, and in April 2024 updated wholesale market trading rules to let batteries complement the calculation of firm power in renewable plants. However, ASEP and industry sources say that the subsequent operating regulations and methodologies that set technical requirements, participation conditions and payment mechanisms have not been completed. National Energy Secretary Rodrigo Rodríguez says Panama intends to introduce storage “in an orderly manner,” and expects the remaining items to be released between this year and mid-next year so a renewable tender with storage could be structured by 2028.
Impact on Investment and Markets
The absence of detailed rules has affected investor confidence and market processes. During a long-term power procurement process in July 2024, the tender was suspended after authorities concluded that bidding documents lacked clarity to guarantee effective competition and transparency. Companies had flagged unclear specifications for battery systems and other required changes, illustrating how regulatory uncertainty can stall procurement and private investment.
Private-Sector Deployment
While generation-scale frameworks are unfinished, deployment in homes, businesses and isolated projects is growing. Industry participants point to falling battery prices and the shift from lead-acid to lithium technologies—particularly lithium iron phosphate—as key drivers of a five-year boom. Industry estimates cited in reporting indicate that in some businesses batteries already account for over 10% of installed solar systems, and payback periods for solar-plus-battery projects have shortened compared with a decade ago.
What This Means
Panama is not debating whether to adopt storage; the debate centers on how to integrate it safely and transparently into the electricity market. Stakeholders from government, operators and private industry agree storage will be important to accompany growth in non-conventional renewables. The coming release of operating rules and methodologies will be critical to unlock larger-scale investment and to enable tenders that include storage without exposing bidders to excessive risk.