Argentina’s distributed generation sector is expanding rapidly due to higher electricity rates, lower equipment costs and shorter payback periods for solar projects of approximately 3 to 4 years. Growth has accelerated since 2019, reaching more than 4,000 user generators and 143 MW installed, with strong private sector adoption.
Argentina’s distributed generation (DG) sector is experiencing strong growth, driven by recent electricity rate adjustments and improving project economics.
“As of today, we have the wind at our backs in Argentina,” said Argentinian electrical engineer and PV specialist Martín Ponsá. pv magazine.
He explained that electricity rates “were frozen in 2019” and subsequent rate increases have significantly changed the economic equation for photovoltaic projects. He added that “equipment prices – especially for inverters and panels – are at historically low levels” and that there is “significant competition in the labor market”, factors that have significantly reduced project payback times. “In the past, when you calculated depreciation, it came out to seven, eight or 10 years; today it hovers around three or four years,” he noted.
Ponsá started working in the distributed generation sector in 2019, following the implementation of Law 27.424. As he recalled, at the time there were “no professionals available to officially certify projects,” and “nobody knew anything – neither they nor us” – referring to utilities like Edenor and Edesur. He explained that he learned the necessary procedures alongside the utilities themselves and has since specialized solely in the bureaucratic and technical management required to authorize user generators. “I act as a partner for the installers; I work closely with them,” he says.
The specialist indicated that he has already participated in almost 400 user-generator authorizations, both for residential and industrial installations. He estimated that these projects represent approximately 7 MW of cumulative installed capacity. “In the context of distributed generation, that is a significant amount,” he claimed. He also noted that approximately 70% of these facilities are owned by private users and that while initial growth was concentrated in gated communities and private residential areas, “the industrial sector is now recognizing the opportunity to enter the market, and they are doing so.”
Regarding the evolution of the Argentine market, Ponsá highlighted that in 2019 there were barely 67 registered user generators; by March 2026, that number had increased to 4,253 users, with a total installed capacity of 143 MW. However, he clarified that the actual figure is likely higher because off-grid installations and systems that never completed the formal grid connection process are not included in the official statistics. “There could be more than 40% of installations that go completely unnoticed,” he claimed.
Regarding the role of electricity distribution companies, he noted that some companies still view distributed generation “as a bogeyman”, although he insisted that the sector also offers new business opportunities. “Every change forces us to reinvent ourselves,” he said, pointing to the possibility that cooperatives and distributors could develop their own solar farms to reduce supply costs.
Ponsá also highlighted that Argentina has started implementing tax incentive programs for energy efficiency and renewable energy. As he explained, the recently issued Decree 242 provides incentives for investments in solar panels, energy storage and energy efficient equipment, targeting small and medium-sized enterprises (SMEs). “That also helps with the depreciation process,” he said.
The engineer argued that Argentina’s market development still lags behind countries such as Brazil, Chile and Colombia; however, he praised the fact that local growth was driven “purely by private efforts,” within a context of limited financing and a historic lack of incentives.
Finally, he noted that one of the models he is keen to promote in Argentina involves on-site power purchase agreements (PPAs) for industrial customers, similar to the models he observed while working in Spain. While he acknowledged that “economic barriers” still existed, he maintained that the model could be successfully replicated locally. “There are plenty of things we can copy and emulate that already work elsewhere in the world,” he concluded.
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