Solar is primed to become the next big thing in many countries in Latin America and the Caribbean.
While we won’t see the explosive growth evident in more developed countries, the conditions are there for Latin America and nations in the Caribbean to become solar hot spots.
“There are going to be certain markets in Latin America and the Caribbean that are primed and ready for solar development as we speak … but many will be slow to develop and it won’t be like the rapid growth we’ve seen in places like Germany, Japan, China and the United States,” says Faisal Bakhteyar, a ClearSky Advisors analyst who has studied emerging PV markets at length. “It’s going to be much more tempered growth but they’re going to be huge markets in time.”
Bakhteyar notes in Central and South America there are fewer incentive programs – such as the US Federal Residential Renewable Energy Tax Credit – spurring sudden interest in solar PV. Rather demand is being driven by factors such as booming population growth and sky-high electrical prices, and a pressing need to diversify the domestic energy mix.
In the many Caribbean islands, for example, customers are paying close to 40 cents per kilowatt hour for electricity, making the upfront cost of solar much more palatable.
ClearSky Advisors has just completed an update of its popular 2012 analysis of the solar PV market across Latin America and the Caribbean, speaking to on-the-ground residential-, commercial- and utility-scale stakeholders for a first-hand look at what’s happening in those countries.
ClearSky has also used its extensive modeling exercises to forecast future markets based on a range of economic and policy factors.
Bakhteyar said forecast modeling completed in 2012 suggested Brazil, Chile, Mexico and the Dominican Republic had strong potential for continued solar PV adoption “and all of them have really emerged as strong markets.”
Bakhteyar said his findings show while the solar markets in some countries have matured, others “have fallen off the map,” largely because of political factors and lack of financing opportunities.
There are obvious success stories, such as the tiny nation of Peru. In 2011, Peru had a total installed capacity of 4.7 MW. By the beginning of this year it had 90 MW of installed solar.
Bakhteyar noted much of this growth is due to several large utility-scale developments, but the Peruvian government is also attempting to bring electricity to disparate residents who until now have not had it, and by 2016 plans to have installed off-grid solar on 500,000 homes free of charge to raise electrification rates from 66% to 95% of the total population.
“I think something like that can definitely have a spillover effect,” Bakhteyar said, suggesting one country’s success with solar can inspire its neighbours to consider the technology. “The success there can demonstrate to other countries that it can be done successfully.”
As part of its ongoing research into emerging global solar PV markets, ClearSky Advisors has recently published an analysis of the policy and market fundamentals that form the basis of the Latin American and Caribbean solar PV markets. If you are interested in more information about our Global Emerging Solar PV Market and Policy Intelligence service, please contact us at firstname.lastname@example.org or call +1-877-333-5821.
Photo Credit: David Stanley