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German PV developer S.A.G. Solarstrom has announced it will begin constructing and complete a 2MWp pilot project in Paiguano in the region of Coquimbo in northern Chile during the first quarter of 2013.

The company will work with a local partner in order to implement the PV system. The pilot project will be built on land leased out by a local farm that cannot be used for agricultural purposes. The land also offers expansion opportunities in the future.

S.A.G. Solarstrom aims to use this pilot project to gain a foothold in the Chilean market and establish a pipeline of large-scale PV projects in the country.  

The location of Paiguano was selected as the Coquimbo region is said to receive a high level of solar irradiation at around 1,790 kWh per kWp. This can be compared with Germany where irradiation levels average between 850 and 1,100 kWh per kWp.

Commenting on the attractions of investing in Chile, Dr. Karl Kuhlmann, CEO of SAG Solarstrom said: "Chile offers very interesting general conditions for investors, even without state guaranteed feed-in tariffs. The country is politically stable, legally secure and shows dynamic economic growth, so that considerably higher energy requirements can be reckoned with over the next few years.”

Dr. Kuhlmann adds: "The 2 MWp system provides us with the opportunity of gaining a foothold in a very interesting growth market, with manageable risks. We are already in talks on how to set up an appropriate project pipeline to include large-scale projects in Chile, after the successfully conclusion of the pilot project.”

The 2MWp PV system is estimated to generate around 3,600MWh of electricity every year which is said to be enough to power 800 four-person households. The landowner will purchase the electricity whilst any surplus electricity will be sold via the spot market.

News of the pilot project will be welcomed by the Chilean government which is seeking to increase the share of renewable energy in power production to 20% by 2020. Chile does not currently offer a feed-in tariff to attract investors. However, the government has been developing initiatives in order to boost the country’s usage of renewable energy. One such initiative includes the creation of Explorador Solar, a public information platform which will be used to assess and evaluate the solar potential in the country.

According to the EPIA's report entitled Global Market Outlook for Photovoltaics until 2016, new installed PV capacity in Chile in 2012 is forecast to reach 25MW while the "policy-driven" figure is set at 100MW for the year.