Don't understand why they have to use the most expensive power. Even people in wealthy countries cannot afford living on solar, but the poor have to. I am quite sure there are more and better options.
It appears to be part of a rural electrification program for areas not currently connected to the power grid. The alternative would be a classic grid-building effort [1], but those aren't necessarily any cheaper, especially in mountainous areas. There's been some movement in recent years towards small-scale non-grid installations instead, e.g. in Jordan [2].
Yup, topography influences energy policy greatly in most countries. Peru is special because of its diversity...China-like in a much much smaller package. Mountains are good because of potential for hydroelectric plants, but not good to build a grid ON them. Jungle has proven a great source of natural gas, but the Andes mountains severs the jungle from the population centers on the coast.
I think solar for the mountain population is very interesting. They don't have anything at all now, not like we're increasing their current energy bill. It's cleaner than most other options, and very low environmental impact for these typical rural communities.
Most other energy sources involve vast infrastructure for ongoing operation. Oil requires processing and shipping every gallon, electricity from large generators requires long wires, coal must be transported, etc. Economies of scale keep such vast complex infrastructure cheap and functioning.
Solar panels, while expensive to manufacture, can be put in a box, carried to the point of use, and left to function on-site indefinitely with nigh unto no maintenance.
Other options? Check out http://www.biolitestove.com - a very recent development of a wood-burning stove featuring a thermocouple electrical generator and very low emissions.
This. People often look past the infrastructure that has to be built and the natural resources required to keep it running.
The systems in "developed" countries have been set up over time to make it "cheaper" to run on oil (for now, but this only going to get more expensive). And even then, you must constantly deal with the supply/demand and inflation issues when it comes to acquiring oil. That issue does not exist with acquiring solar energy. With PV's and CSP, one side of the equation takes care of itself (radiant energy from the sun).
[1] Along the lines of http://en.wikipedia.org/wiki/Rural_Electrification_Act
[2] http://www.uob.edu.bh/uob__files/458/vol1/6.pdf