Latin America is on target to install 2.7 GW of new solar PV capacity in 2016, according to new figures from IHS Markit.
However, IHS Markit, a leading critical information, analytics, and solutions broker, is quick to warn that challenges still remain for the Latin American solar PV market.
The Latin American market has become a focal point for analysts and experts, as it likely represents one of the next big growth markets for renewable energy. A similar report published in early June by research firm GTM Research concluded that Latin America was on track to install 2.2 GW of solar PV in 2016, up 55% over 2014’s still relatively impressive 1.4 GW.
According to new figures and analysis from IHS Markit, public tenders throughout Latin America “are raising the pulse of the market,” with numerous projects being assigned throughout the region. However, actual development of the resulting winning bids often take longer than initially planned, with administrative barriers getting in the way, or the simple measure of postponing construction to take advantage of ever-decreasing component pricing.
Nevertheless, there is good news ahead for the region, even if the reality doesn’t always meet the expectation.
Chile remains the region’s leading PV installer, and will account for 44% of new additions in 2016, following hot on the heels of several years of intense and rapid growth. However, this is likely to subside somewhat in the coming years, as parts of the Chilean grid continue to reach saturation point, and as power prices fall as anticipated.
Following in the wake of Chile is Honduras, which is also soon to be overtaken by Mexico. In addition to tenders announced in Brazil, Uruguay, Mexico, and Peru, Argentina is set to announce its own, backed by the World Bank which plans to step in with guarantees for 1 GW, of which 300 MW will be supplied by solar PV.
“Recent record-low bid prices — as low as $48 per megawatt-hour in Mexico — are attracting the interest of governments,” said Josefin Berg, senior analyst, solar demand, IHS Markit. “Meanwhile, these bid levels raise the pressure on suppliers, as the procurers will be squeezing the total system costs to make the projects viable.”
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