Solar PV Catching On Fast in Latin America, Caribbean

Countries across the Latin America and Caribbean (LAC) region are making increasing use of renewable energy resources to spur sustainable development. Use of solar photovoltaic (PV) technology, for instance, “is poised to play a substantial role in fulfilling the need for increased power generation capacity” throughout the LAC region, according to an NPD Solarbuzz market research report released September 29.

A gigawatt (GW) of PV projects are under construction across the LAC region at present. That's just the tip of the iceberg, however, according to NPD Solarbuzz's “Emerging PV Markets Report: Latin America and the Caribbean.”

The PV project pipeline across the LAC region now exceeds 22 GWs across all phases of development, NPD Solarbuzz highlights in its report. Some 9 GWs of PV capacity will be installed over the next five years, with 5 GWs already approved and primed to move ahead into the construction phase.

Shifting PV market dyanmics

The nature of the PV market in the LAC is changing, NPD Solarbuzz report authors note. Whereas PV projects in previous years have largely been small-scale and off-grid, governments across the region are restructuring legislative and regulatory schemes by instituting policies and programs that promote utility-scale, as well as larger commercial, industrial and rural, PV electrification projects.

Greater government support for large-scale PV project development is especially notable in the LAC region's largest economies – Brazil, Chile and Mexico. “Many of these projects,” the report authors add, “are being developed by experienced international firms, including leading U.S.-based companies First Solar, SunPower and SunEdison, and European developers Mainstream, Enel, and Solaria, which is increasing the likelihood that these projects will ultimately be executed.”

“Solar PV is now starting to emerge as a preferred energy technology for Latin American and Caribbean countries,” NPD Solarbuzz Senior Analyst Michael Barker was quoted in a news release. “The region has high electricity prices and it also benefits from strong solar irradiation, which makes it a good candidate for solar PV deployment. As a result, experienced global solar PV developers are seeing strong solar PV growth potential in the region.”

Leading solar PV adoption in the Latin America-Caribbean region

“Many countries across the LAC region have the potential to develop into major solar PV markets in the future,” Barker added. “While project pipelines vary by country, there is a strong contribution from early-stage developments that have yet to finalize supply deals or find end-users to purchase the generated electricity, which presents both risks and opportunities for industry players.”

The promise of stable, lower cost clean and renewable power supplies is particularly attractive in the Caribbean region, where heavy reliance on oil and natural gas for power generation takes a heavy economic, as well as environmental, toll. Though Caribbean nation government leaders have been making statements pledging to promote and foster a transition to clean, distributed renewable energy sources, actual installations of residential and commercial PV continues to lag behind expectations.

In Mexico, mainstream news media has focused on President Enrique Pena Nieto's historic energy reform bill to unleash a flood of investment from multinational oil and gas companies. Nieto's energy reform bill opens up oil and gas exploration and production and refining to foreign firms for the first time since Mexico nationalized its oil reserves and industry in 1938.

Much less reported on, Mexico's energy sector reform is also expected to bring a lot more in the way of renewable energy resource investment and project development. Mexico's El Economista recently reported that Mexico has 40 GW of wind energy resource potential. Our southern neighbor, El Economista continues, is poised to become one of the fastest growing wind energy producers in the world. More than 1.3 GWs of wind power was installed in Mexico in 2012. Market analysts forecast that more than $20 billion in wind energy investments will be made in Mexico over the next decade.

Chile has emerged as another regional LAC renewable energy leader, particularly when it comes to promoting large, utility-scale projects. In September Chile's Environmental Assessment Service approved the South Campos PV project. Some $1.6 billion is to be invested in bringing the massive, 698-megawatt solar power facility online. South Campus PV facility is being built in Chile's northern Atacama region, which is home to some of Chile's largest mining operations. The driest desert in the world, the Atacama also has one of the highest solar irradiation rates on earth.

*Image credits: NPD Solarbuzz