State-run utility Comision Ejecutiva Hidroelectrica del Rio Lempa said it would set up the Central American nation's first utility-scale solar and wind projects to diversify its energy mix.
The company known as CEL announced it plans to auction development rights for a 14.2-megawatt solar farm in 2013 and for a 42-megawatt wind farm the following year.
El Salvador's quest for alternatives to hydrocarbons has taken the country to different directions. Faced with tough choices for new hydroelectric power generation capacity, the country has looked at wind farms and solar energy.
The first solar farm will likely cost $110 million and be financed by Germany's KfW Bankengruppe, the European country's state development bank.
El Salvador generates about 70 percent of its electricity from oil and hydroelectric dams but is facing increased costs of fuel imports.
Meanwhile, private sector initiatives for solar power generation in El Salvador are also increasingly under study after a pioneering hotel installation.
California company Cogenra Solar said it would work with InterContinental hotels on a solar cogeneration installation at their property in San Salvador.
The roof-top installation at the Hotel Real InterContinental in San Salvador is the world's first hotel to implement solar cogeneration technology, delivering heat and electricity on demand.
Working together with THINKnrg, a U.S. firm that implements on-site clean energy solutions in the U.S. and Latin America, Cogenra Solar constructed the 122kW solar cogeneration system in about six weeks.
The 48-module SunPack installation will produce solar electricity and approximately 16,000 liters of hot water daily for showers, laundry, cleaning, and food-preparation. The installation serves as a pilot solar cogeneration system for IHG's Central America hotels as the company considers deploying multiple installations throughout the region, the group said.
"The San Salvador IHG installation and subsequent evaluation will facilitate widespread renewable energy deployment in Central America," said Dr. Gilad Almogy, chief executive officer of Cogenra. "The adoption of solar cogeneration in Central America is a testament to Cogenra's flexible design, architecture and capital-light manufacturing strategy, in which sub-assemblies from our vendors are shipped directly to our customer and integrated quickly on site. The strategy allows us to rapidly scale and reach new markets worldwide."
The system covers about 3,000 square feet of roof space and is expected to offset approximately 24,000 kilowatt hours of electricity while decreasing the hotel's hot water fuel consumption by 120,000 kilowatt hours annually. In addition to lowering the hotel's energy bills, the solar cogeneration system will decrease greenhouse gas emissions by 174 tons of carbon dioxide each year.
"Currently, energy costs account for approximately 10 to 15 percent of all hotel expenses," said Dominique Gapany, regional director of operations of Real Hotels and Resorts. "By implementing solar cogeneration, we will be able to reduce our energy expenses and help the environment by reducing our consumption of traditional energy sources and our greenhouse gas emissions."
Cogenra's solar cogeneration system tracks the sun, converting about 15 percent of the delivered energy to electricity, similar to other photovoltaic technology. In addition to electricity production, Cogenra's technology captures the waste heat, dissipated by standard PV systems, utilizing it for various applications such as water heating, space heating and cooling.
In total, solar cogeneration uses over 75 percent of the sun's incident energy -- making this hybrid technology more efficient than a stand-alone PV or solar hot water system.