In Honduras, local communities miss out on benefits of large-scale renewables

CHOLUTECA, Honduras — Under the slogan “Without human rights, there is no energy sovereignty,” more than 100 community members and activists gathered in mid-July at the Casa Real Hotel in Choluteca, a city in southern Honduras near the Nicaraguan border. At the event, participants — a mix of nonprofit leaders and community members — questioned the fairness of large-scale renewable energy projects in their territories, claiming the projects leave them without water and forests, and exposed to extreme heat. Yet reliable data on the impacts of renewable energy projects in southern Honduras remain scarce.

In Honduras, where fossil fuels account for about 38% of the electricity supply, and where the World Bank estimates that about 1.4 million people lack access to electricity, experts told Mongabay that there’s an urgent need for an energy transition. That need will grow as the climate warms and national energy demand rises by a projected 39% from 2025 to 2035.

Yet, community members in southern Honduras say large renewable energy projects come at the expense of the environment and of their well-being. They blame solar, wind and hydroelectric projects for deforestation, droughts and floods, and describe unbearable temperatures near solar farms. Some who have opposed the large-scale renewable energy projects have been threatened, displaced or even killed. Families living adjacent to solar projects in Choluteca report still lacking access to electricity. Many say they don’t feel the benefits of the energy transition; they either pay high prices for power or remain without, while the jobs and income promised by companies have failed to materialize.

One of the projects facing resistance is the Choluteca solar park, less than 10 kilometers (6 miles) from Choluteca city. Long stretches of solar panels are laid out in rows across dozens of hectares. The solar park has three solar photovoltaic power plants with total generating capacity of 81.7 megawatts, equivalent to about 5% of Honduras’s peak electricity demand. The $146 million project was developed by U.S. company SunEdison Inc. in 2014 and funded through loans from multilateral bodies. The project is now operated by the Guatemalan multinational Corporación Multi Inversiones, after SunEdison filed for bankruptcy in 2016.

Energy woes in the south

Located in Central America’s Dry Corridor, Choluteca is one of the Honduran departments increasingly affected by drought and severe water stress. Historically, the south has always been drought-prone, but the situation has worsened with the loss of tree cover and intensifying impacts of climate change, according to Laura Palmese, executive director of the Environmental Law Institute of Honduras, a local NGO.

Choluteca and other departments in Honduras’s poorer south supply most of the electricity that flows to the country’s industrial northwest, to cities like San Pedro Sula. Just 18 of 259 municipalities account for about 80% of the country’s electrical consumption. Meanwhile, many citizens in the rural south live in energy poverty. While 98% of urban households have electricity, in rural areas only 69% are connected to the grid, while 22% have no electricity at all.

“The energy produced in the south is not for the local communities, rather, it is sent north,” says Mónica Torres, a project coordinator at the Honduras office of German nonprofit Friedrich-Ebert-Stiftung.

Solar energy from Choluteca costs about 15 U.S. cents per kilowatt-hour, as stipulated by the 2014 contracts with solar companies; the regional average in Latin America is about 11 cents/kWh.

Gonzalo Fernández Ortiz de Zárate, coordinator of the Observatory of Multinationals in Latin America (OMAL), attributes the higher electricity prices in part to the 23 solar contracts awarded in 2014, which locked state-owned electric utility ENEE into paying some of the highest tariffs in the region, contributing to the company’s mounting debt problem. In 2024, the Honduran government renegotiated 18 of the contracts to bring prices down, but some affected companies refused to renegotiate and instead took the Honduran government to international arbitration using a controversial investor dispute settlement mechanism to claim compensation. Corporations’ claims from the electricity sector alone amount to more than $1.6 billion. However, in late October, Norwegian solar companies dropped some of the arbitrations against the Honduran government. The reasons for discontinuing the arbitrations are unknown, but cause concern amongst some activists, sources tell Mongabay.

“The problem in Honduras is not about production, it’s about distribution,” says Lucía Vijil, adviser on environmental and ecological justice at Center for the Study of Democracy (CESPAD) at a meeting in Tegucigalpa, the country’s capital.

Honduras’s energy system is also highly inefficient; in 2022, 38% of all energy produced was lost, compared to losses of 10% in El Salvador that same year, or 14% in Guatemala in 2021.

“The solar energy from the south can still not enter the system,” Vijil says.

Experts say high transmission and distribution losses further contribute to high prices.

Jorge Cárcamo, national director of energy planning and sectorial energy policy at the Honduran Ministry of Energy, agrees that low energy efficiency and a poor transmission network are among the main challenges in Honduras’s energy system.

“The current transmission grid in Honduras is extremely obsolete. It has been many decades since it was built, and the investment … in its maintenance and updating has been, at best, negligent,” he tells Mongabay in a video call. He adds that in 2021, the government created an educational program to improve citizens’ energy efficiency, and in 2022, rolled out a national program to reduce energy losses. 

By 2038, the Honduran government aims to boost the share of renewables in electricity generation from about 60% to 80%. Between 2010 and 2021, the share of electricity from solar power went from nearly zero to 19%. Cárcamo says Honduras has a very high potential for renewable energy generation, especially from solar, wind and hydropower.

“The south of Honduras has the highest solar energy potential in all of the country,” he adds. 

Despite renewable energy projects taking off in the past decade, some experts and activists say there’s no energy transition in Honduras.

“We cannot talk about having a policy for green transition,” says Palmese from the Environmental Law Institute. Instead, she says, the government continues to bet on oil extraction as a form of development. In 2023, about 38% of Honduras’s electricity was generated by fossil fuels. OMAL’s Fernández Ortiz de Zárate agrees, saying the government “is betting as much on fossil fuels as [on] renewables,” and that there’s no real planning to phase out the former in favor of the latter.

Community concerns

“In 2014, machinery came in and destroyed our flora and fauna. We didn’t know why,” says Jorge Maradiaga, a community leader in La Fortunita del Carrizo, a municipality in Choluteca.

That marked the arrival of one of the many solar projects in the Choluteca department. Since that solar farm was installed, Maradiaga says, the creek in his community has been drying out due to higher temperatures and water use. His community has grown almost unbearably hot and humid, he adds. But while temperatures tend to be higher near solar farms, experts point out that Choluteca is part of Central America’s Dry Corridor and that rising temperatures are part of a regional trend, not attributable to solar parks.

In southern Honduras, “there is a lack of water, there is a lot of drought, there is extreme heat and floods, but not because of renewable energy projects,” says Alejandra Gabriela Ramírez, an environmental engineer based in Tegucigalpa. “Extreme heat has increased due to climate change.”

Maradiaga says the solar companies promised jobs and development, but hired few locals. Instead, he says, the solar projects have wiped out a key source of income: calabash trees (Crescentia cujete) and their fruits.

“We want to cultivate, but we can no longer do that due to the high temperatures. It’s so dry, the crops don’t grow anymore.” Maradiaga adds the solar companies are “enriching the ones who already have money, not our communities.”

Companies often tell local communities that their renewable energy projects will generate jobs and cheaper energy for them, says Germán Chirinos, coordinator of the Southern Social Environmentalist Movement (MASSVIDA), a grassroots advocacy group in southern Honduras. “How is it possible that here in Choluteca there are so many projects of solar, wind and other renewable energy projects, and yet we have such expensive energy and some people don’t even have access to it?” he says.

Communities along Honduras’s Caribbean coast share similar frustrations.

“The transition has not been fair, nor democratic,” says Rony Castillo, a member of the executive team at the Honduran Black Fraternal Organization (Ofraneh), a grassroots group defending the rights and territories of the Garífuna people. “We thought renewable energy was going to be cheaper, better for the environment, and that we would have access to energy. But we don’t have energy, we have more killings and more criminalization.”

Cárcamo, from the energy ministry, says the current situation, where some communities living next to big energy projects don’t have access to electricity, “is illogical.” He says the government is trying to expand its distribution network to those communities or help them build micro networks to produce and consume electricity locally. He also says the government is exploring ways to require new energy projects to ensure access for local communities.

Community members often feel excluded and lack both information and a voice in decisions, according to Chirinos. Honduran law requires that local communities be consulted before the start of projects that could degrade the environment, but community activists say such consultations are often incomplete or poorly implemented. Maradiaga says that in his community’s case, they asked the solar company to show the record of prior socialization, “and they had nothing”.

Gabriela Ramírez says there’s a lot of misinformation in local communities about the impacts of renewable energy projects. She adds that “communities need to be taken into account and properly informed about the renewable energy projects.”

A consultant who worked on environmental evaluations and engagement with communities for a large renewable energy company in Honduras, and asks not to be named because they weren’t authorized to speak on behalf of the company, says communities often “generalize and confuse companies.”

The consultant says their company complies with regulation, “even though the government doesn’t audit us [companies] as it should. The government doesn’t demand from us what it should in terms of complying with the law.” The consultant says community councils often sign agreements in which they agree to the renewable energy projects without consulting with their own community members, contributing to social conflict. The consultant suggests having representatives from the municipal or departmental governments present at meetings could help legitimize the processes, but notes that local governments often don’t have the funds to send representatives to attend such meetings.

Cárcamo says that, historically, “energy projects in Honduras have been done without any respect for the local communities. This has brought a lot of problems today, because they no longer trust in the government.”

Maradiaga says he worries about what will happen 20 to 30 years from now, when the solar panels reach the end of their lifespan. “Where will all these materials that they no longer use go?” he says.

Torres, from Friedrich-Ebert-Stiftung, says that “what is left is the trash, not the benefits.”

When community members resist large energy projects, they risk being threatened or even attacked, according to human rights defenders. Maradiaga says he’s experienced this firsthand, in the form of anonymous calls telling him to accept money and stop resisting a local solar project. According to advocacy group Global Witness, six environmental defenders were killed in Honduras in 2024 for their work, making it the sixth deadliest country in the world for such defenders.

“There is no rule of law” in Honduras, says Ligia Ramos, a Honduran congresswoman. She says it’s important to strengthen Honduras’s justice system to protect environmental defenders. 

Environmental impacts

At the community event in Choluteca, most locals complain about the deforestation of their territories to make way for the renewable energy projects. A 2014 environmental impact assessment by the Honduran renewable energy company Soluciones Energéticas Renovables S.A de C.V. prior to the start of the Choluteca II project says it was established on lands that were already deforested. But testimonies from local experts and community members paint a different picture.

“There is just no way that they didn’t cut down trees, I just don’t believe that,” says Karen Spring, a coordinator for the Honduras Solidarity Network, about the claims that solar projects in Choluteca didn’t involve deforestation. She adds that while poor people risk arrests or fines for cutting trees illegally, companies that come in and cut trees are treated very differently.

“I know there’s been deforestation, of course they had to remove everything that was on the ground,” says Palmese about the renewable energy companies that operate in Choluteca and other parts of southern Honduras. “It is very difficult to find an area where everything is ready [for renewables], where there wasn’t anything at all.” 

Torres and CESPAD’s Vijil say there’s a big data problem in Honduras, where local testimonies are often the only evidence to support claims of environmental harm. “Presenting the evidence could be a death sentence,” Vijil says, and “institutions provide no support.” 

Fernández Ortiz de Zárate says that although there’s a direct link between deforestation and renewables, the latter isn’t the main driver of Honduras’s deforestation. Between 2001 and 2024, Honduras lost nearly a fifth of its forest cover, according to Global Forest Watch. The biggest driver by far is permanent agriculture (88.6%), followed by shifting cultivation (4.7%) and wildfires (4%). According to Fernández Ortiz de Zárate, using wood to generate energy – as it’s often the case in Honduras – is much worse for forests than using solar panels. However, mega projects like the ones in Choluteca will always imply some tree cutting, he says.

Rafael Gómez, a project director at Honduras’s National Institute of Forest Conservation (ICF), says solar farms need to be built on flat land, and therefore usually occupy spaces that have already been deforested. He says renewable energy projects “are not significant” as a driver of deforestation in Honduras.

“We cannot compare it with the advancement of livestock farming. Nor can we compare it with the progress of migratory agriculture. Likewise, we cannot compare it with the growth or development of communities — cities and towns continue to expand into forested areas,” Gómez says.

Renewable projects in Honduras often lack not only prior social consultations, but also proper environmental impact studies before they’re developed, according to Palmese. Honduran national law defines four types of projects, only one of which requires an environmental study. Palmese says this “is very concerning.” She says the legal regime has been made more flexible without the necessary controls to ensure that renewable projects don’t harm the environment.

Palmese also says environmental impact studies and social consultations, when they’re done, are often unreliable. She points out that the consultants who carry out the studies are paid directly by the project developers and thus have an interest in downplaying negative impacts in order to allow for new projects.

A different energy transition?

Despite the challenges, an energy transition in Honduras and other Central American countries is necessary to mitigate the climate crisis and because fossil fuels will run out, says Fernández Ortiz de Zárate. But he adds it’s also necessary for the world to find ways to use less energy and materials.

He says frequent blackouts and a mismatch between supply and demand have created an energy emergency in Honduras. As one of the poorest countries in the region and with a history of elite capture and political corruption, it’s particularly hard for Honduras to push the energy transition, Fernández Ortiz de Zárate says.

He adds the question for Honduras isn’t whether there should be an energy transition, but how it should be done. He criticizes mining and renewable mega projects that he says are done without prior consultation, by appropriating lands and water, degrading ecosystems, and without agreement from local communities, who instead are criminalized or even killed.

Fernández Ortiz de Zárate says Honduras should instead focus more on small-scale renewable projects that align with community needs. Spring says she agrees, adding that “renewables on a small scale would be fantastic, like installing 4-5 hectares [10-12 acres] of panels next to poor communities.”

“We need an energy transition, but not one that will compromise people’s daily lives,” says Ramos, the congresswoman.

According to Gómez, Honduras should make regulations that counteract the impacts of the growing number of solar farms. He suggests that all owners of solar farms set aside areas for forest conservation. He also calls for regulating permits and environmental licenses to require renewable companies to plant trees.

“For example, if we are going to grant you permission to develop a certain area of solar panels, you must triple that area in forest management within the country or within the same zone where the project is located. That could be one of the actions,” Gómez says.

Multilateral development lenders like the International Monetary Fund, the World Bank’s International Finance Corporation (IFC), and the Inter-American Development Bank currently support various large-scale renewables projects across Central America.

“It is hard to understate the role of development finance institutions like the IFC in funding and creating legal frameworks that move countries like Honduras in the so-called energy transition away from fossil fuels towards solar, wind, hydro and biothermal,” Spring says. 

The IFC and the Central American Bank for Economic Integration (BCIE) helped finance the Choluteca Solar I and II projects. According to Spring, the IFC also helped create the legal framework for large-scale private sector projects to be implemented in Choluteca and other parts of southern Honduras.

Ramos says it’s important to push for diligent environmental impact studies and prior consultation and involvement with local communities. Experts say there’s also a need to strengthen Honduran institutions to build the capacity to review and investigate large-scale renewable energy projects properly before they start.

Ratifying the Escazú Agreement, a Latin American treaty on environmental rights and defender protection, could be part of the solution, according to Palmese, Vijil and Torres. They argue that its ratification would oblige the Honduran government to make information on renewables projects and their environmental impacts publicly accessible. It would also help protect Honduras’s environmental defenders. Palmese says given the difficulty of accessing information in Tegucigalpa, the capital, “then I don’t imagine how difficult it can be in Choluteca.”

Citations:

Munguía, G., & Villatoro, H. (2023). Spatial distribution of Honduran electricity demand. E3S Web of Conferences, 379, 03005. doi:10.1051/e3sconf/202337903005

Barron-Gafford, G. A., Minor, R. L., Allen, N. A., Cronin, A. D., Brooks, A. E., & Pavao-Zuckerman, M. A. (2016). The Photovoltaic Heat Island Effect: Larger solar power plants increase local temperatures. Scientific Reports, 6(1). doi:10.1038/srep35070

Banner image: The Marcovia Solar project, Choluteca, one of the solar projects included in the claim by X-Elio against the government of Honduras. Image courtesy of Karen Spring. 

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