By Michelle Stern, Research Analyst
This article is part of a series from our Latin American and Caribbean PV Markets Research Service, which includes coverage of solar PV markets in Latin America and the Caribbean.
–Despite not having a feed-in-tariff scheme or other tax subsidies, Chile has already seen grid parity achieved for solar PV in some parts of the country. In June 2012, Spanish-based Solarpack announced they had completed their first grid-connected PV plant in Chile. The 1 MW project has been able to generate and sell energy at market prices without any public subsidies. The project was funded entirely by the developer.
This is but one example of the rapid growth that is taking place in Chile’s PV market. Indeed, ClearSky Advisors has stayed informed of market advances and changes since the publication of our report on the solar PV market in Chile earlier this year and, due to very recent developments, our cumulative forecast for 2012-2016 has increased by almost 13%, to 1520 MW.
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- Article: Chile Forecast: A Perfect Storm for PV
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- Research Service: Latin American & Caribbean PV Markets
Of course, Solarpack is not the only company taking advantage of Chile’s fantastic solar resource and increasing energy demand. There is estimated to be over 700 MW of PV projects that will soon begin construction in Chile and another 2 GW of projects awaiting environmental permits. Chile has continued to attract the attention from developers around the globe who face a slowing domestic market at home and who are in search of new, emerging markets with a fertile environment for solar development. With the arrival of grid parity, Chile clearly provides such an environment.
Furthermore, Chile, the world’s leading copper producer, has attracted significant investment from China, a leading copper consumer. For example, Chinese company Sky Solar announced in June 2012 that they will be building a massive 300 MW PV project in Chile with expected completion in 2015. Funding is expected to come from the China Development Bank.
Over the next 5 years, Chile will be an important market for both domestic and foreign PV manufacturers and developers. Although it has been proven that solar PV can compete without subsidies, the government has been discussing important policies that could spur the market even more.
Since signing power purchase agreements (PPAs) with mining companies in Chile’s northern desert, a number of PV plants have recently started construction and it is expected that many more projects will be financed through PPAs in the future. In fact, in order to secure financing, Chilean banks require a signed PPA before they will even consider funding a project. Although Chile’s often volatile electricity prices pose a challenge for PPAs, such agreements may be the most cost-effective option for a sector whose growth could be slowed only by limited electricity supply
For all these reasons, Chile remains an important market to watch, which ClearSky Advisors will continue to do as part of its solar PV Market Service for Latin America and The Caribbean.
Through extensive research with industry players and leaders, ClearSky Advisors provides continuous coverage of existing and future market opportunities for solar PV markets in Latin America and the Caribbean. If you are interested in more information about our Latin American & Caribbean PV Markets service or a free research sample, please contact us at email@example.com or call +1-877-333-5821.
Photo Credit: jovengandalf