In southern Peru, in a desert that stretches along the coast of the Arequipa region, the sun seems to burn relentlessly. Solar radiation is high here, and there are more hours of sunshine per day than anywhere else in the country. In the district of La Joya, the government has for several years been promoting solar power generation and the creation of the country’s first green hydrogen plant. It’s a challenge that is slowly beginning to take shape.
According to the Solar Energy Atlas of Peru, produced by the National Meteorology and Hydrology Service of Peru (Senamhi), La Joya has the highest solar radiation values in the whole of Peru, with average daily solar energy reaching 7.03 kilowatt hours per square metre. It also has a relative sunshine duration of 75%, a statistic based on the possible and actual hours of sunshine relative to location and time of year.
Elías Huamaní, 46, is the elected president of the Cristo Rey Population Centre, a small settlement of 5,000 in La Joya. He has lived here since he was 16 and tells Dialogue Earth that, in his entire life, he has seen the sky “very rarely cloudy”, adding: “It hardly ever rains.”
“It is an area with a lot of solar radiation, with more than nine hours of sunshine a day and clear skies almost all year round,” José Luis Ticona, a climatology specialist at Senamhi, tells Dialogue Earth.
Huamaní is not surprised when he sees from afar how the desert is filling up with solar panels, but he says no one from the companies or the government has approached the community to talk about these developments.
In another town in La Joya, called San José, community leader Marcos Calcina knows only slightly more about proposed solar projects. He and his association had a public hearing with Acciona Energía Perú, one of the companies that will set up in the area.
“They explained the details of the environmental impact to us. It is the only company that has met with us. They say there are more companies, but we don’t know anything about the rest,” Calcina says. He adds that Acciona told communities the project will be located outside of the town centre, will generate jobs for local people, and that Acciona will also carry out works to improve local services such as schools, roads and health centres.
Notable growth in solar projects
The San Martín solar power plant became the largest in Peru when it began operating in La Joya in early June. The project, by Zelestra, a global renewable energy developer headquartered in Spain, features 450,000 solar panels that will reportedly generate 830 gigawatt hours of clean energy each year. Attending its inauguration on 17 July, Peru’s president Dina Boluarte said the plant will benefit 440,000 families.
However, the first significant solar projects in the country date back more than a decade. In 2012, Spanish company T-Solar built Peru’s first utility-scale photovoltaic power plant in La Joya, installing 55,704 solar panels to generate 22 megawatts of power.
Now, construction is underway on the Illa solar power plant in Arequipa, which will leapfrog the San Martín plant to become the largest in Peru. Ernesto Oliver, spokesperson for the Enhol Group, tells Dialogue Earth that the Spanish company will install more than 742,000 solar panels with a generation capacity of 472 megawatt-peak. This is a unit of measurement unique to solar energy, measuring the cumulative peak capacity of all modules in a solar power plant.
“We are in the middle of the construction phase. The entire plant is expected to be operational by the end of 2026. Arequipa has a high energy demand, particularly from the mining sector,” says Oliver.
There are several more projects with authorisation to begin construction in Arequipa. These include the Misti Continúa solar plant (507,690 panels), the Sunny plant (612,000 panels) and the San José plant (312,648 panels). There are a total of 29 solar farms planned for the region, according to the Supervisory Agency for Investment in Energy and Mining (Osinergmin).
To meet this high demand, the Chinese company JA Solar, one of the world’s leading panel manufacturers, is seeking to become a strategic partner in many of these projects. As confirmed to Dialogue Earth by Cristhian Romero, JA Solar’s sales manager in Peru, two contracts (with the companies Inver Management and Acciona Energía Perú) have been signed worth more than USD 60 million, and by the end of 2026 they will reportedly deliver more than 900,000 modules exceeding 650 megawatts.
“This investment is a milestone for the company in Latin America. The Peruvian market is at a key stage in accelerating the energy transition, and we want to be an active part of that process. Arequipa represents a fundamental axis within our strategy,” says Romero.
Other opportunities
“In the last five years, La Joya has grown by 30% in terms of housing. Seventy percent of the population is engaged in agriculture, 20% works in various companies, and the rest are self-employed,” La Joya’s mayor Christian Cuadros tells Dialogue Earth. The 2017 census reported the district’s population as 35,943 but Cuadros estimates it is now around 66,000.
In 10 years’ time, La Joya will be the most developed district in southern PeruChristian Cuadros, Mayor of La Joya
He believes the interest of foreign entrepreneurs in developing photovoltaic plants in his district will have a positive impact. The local government is working with the Arequipa College of Architects to develop an urban development and zoning plan to define which areas will be for urban growth, agriculture and industrial zones, and where renewable energy resources will be developed.
“In 10 years’ time, La Joya will be the most developed district in southern Peru,” Cuadros claims.
Patricio Lewis, an economist with the Network for Development Studies (Redes), says photovoltaic projects will be able to meet the energy demands of the many upcoming mining investments in Arequipa, such as Tía María, a USD 1.8 billion copper mine, and Zafranal, a USD 1.9 billion copper and gold mine.
Hydrogen on the rise
Peru’s electricity comes from various sources. In 2024, production consisted of 51% hydroelectric, 40% thermal-natural gas, and only 9% from renewable energies (sun, wind, and biomass), according to data from COES, Peru’s energy operating company.
César Butrón Fernández, president of COES, tells Dialogue Earth he expects the renewable energy share of Peru’s total electricity generation to reach 34% within the next 10 years. To achieve this, he says green hydrogen, produced using renewable energies such as solar and wind, could play an important role in Arequipa and the country as a whole.
Demand for hydrogen is increasing because it does not produce greenhouse gases when burned.
⚪️ However, fossil fuels are typically used to produce the hydrogen in the first place. This is known as “grey” hydrogen.
🔵 “Blue” hydrogen is also produced using fossil fuels but alongside carbon capture and storage technology, which stops the resulting greenhouse gas emissions from reaching the atmosphere.
🟢 Hydrogen can only be classified as “green” if it was produced entirely using renewable energy.
In this regard, there are two proposals in Arequipa that have generated considerable hopes in the sector. The first is the Horizonte de Verano green hydrogen project by the US company Verano Energy, which has had an environmental impact study approved by the Ministry of Production.
According to the document, this project, which aims to produce up to 85,000 tonnes of green hydrogen per year, would begin construction this year and start operating in 2028.
The second project is from the South African company Phelan Green Energy, which has submitted a proposal to the Regional Government of Arequipa (GRA) for both parties to move forward with the project. Phelan’s country manager, Jean Luois Gelot, says the GRA has made 5,000 hectares available for the project in Santa Rita de Siguas district for the solar plant and 50 hectares in the coastal city of Matarani for the hydrogen plant.
“We will enter into a public-private partnership as an active project. The state provides the land and receives compensation. The GRA is not investing a single penny and is not liable if the project fails,” Gelot tells Dialogue Earth. “We have already presented the financial model, which will undergo a technical and economic evaluation by the regional government and then by the regional council.” He confirms the investment will be around USD 2 billion to produce 75,000 tonnes of hydrogen per year.
In view of all these investments, the president of the Peruvian Hydrogen Association (H2 Peru), Daniel Cámac, tells Dialogue Earth that “with the new projects, Arequipa must be prepared to become an industrial hub for hydrogen production and consumption.” Otherwise, he concludes, all the ambitions to turn the region into an international destination for clean energy production – as business leaders have repeated regularly – could remain mere dreams.
