GTM Research has forecast that markets across Latin America and the Caribbean will install 459MW in 2013.
By 2017, annual installations are expected to be over 5.7GW, bringing the market's cumulative grid-tied solar capacity to 13GW over the next five years, details GTM’s report Solar in Latin America & The Caribbean 2013: Markets, Outlook & Competitive Positioning.
The report singles out Chile, Mexico, and Brazil which have the most potential for growth. There has also been development in other markets such as Peru, Ecuador, and the Caribbean island nations.
“To date, little grid-connected solar has been installed in Latin America and the Caribbean,” said Andrew Krulewitz, the report's author and a Solar Analyst at GTM Research.
“The current industry in these countries is primarily comprised of distributors serving the off-grid market. This lack of domestic competition is seen by solar players as an opportunity to be a first-mover in markets with tremendous growth potential. While there are few pure-play solar companies operating in these countries, there are incumbent firms that operate in similar industries that could easily transition into the solar space. As some foreign entrants have already discovered, local knowledge has proven far more valuable than solar-specific experience when operating in these new markets.”
Chile has the largest solar project pipeline in the region with more than 6GW of projects announced. Of this, just 10.8MW are currently operating with a further 22MW under construction. Earlier this month, Chile announced the approval of 3.1GW worth of PV projects in the pipeline.
While Chile promises to be the region's largest market, factors including a complex electricity market structure, solar hesitancy on the part of large offtakers, and, subsequently, a lack of financing will provide significant obstacles over the next five years.
Brazil is another market that set the solar industry abuzz in 2012, said the report. The country's electricity regulator introduced new net-metering legislation early last year to jump-start Brazil's distributed generation market. While much of Brazil's long-term growth potential lies in the distributed market, the market has not been exempt from the utility-scale solar land-grab. More than 2GW of large-scale projects have already been proposed in the country. In addition, many sub-1MW projects have been announced to prepare for the upcoming 2014 World Cup and 2016 Olympics.
Mexico is the last of the three markets with potential for meaningful near-term growth. Unlike Chile and Brazil, in Mexico the framework for the rapid growth of solar, both distributed and utility-scale generation, is already in place. Net-metering was enacted in 2007, and this fact alone immensely simplifies development throughout the country. With regard to utility-scale development, independent power producers have been gaining a foothold, especially with regard to renewables. The national electric utility, CFE has already constructed two pilot projects and has also signed a PPA with a 46.8MW project being developed by Sonora Energy Group.
Keith Martin, Partner at project financier Chadbourne & Parke told PV-Tech, “The conclusion that new solar installations in the region will reach 5,700MW a year by 2017 is astounding, given that it is already 2013 and the market is basically starting from a standing start.
“We are already seeing a lot of activity in renewables in the region, particularly in Mexico, Chile, Peru, Brazil and Puerto Rico. Many large US, European and Chinese wind and solar developers and manufacturers have been shifting resources and attention to the region in the last 18 months.”