Latin American Photovoltaic Power Set to Grow at 45% Through 2017

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Demand for solar photovoltaic (PV) energy across Latin America and the Caribbean is poised for explosive growth through 2017, with a compound annual growth rate (CAGR) forecast at 45%, according to the new NDP Solarbuzz --Emerging Markets Report: Latin America and Caribbean.

"Historically, PV demand was confined to rural off-grid and niche applications, but new renewable energy policies and incentive programs are now opening up the region for strong PV deployment. Set against a backdrop of strong economic growth, expanding energy demand, and increasing electricity prices, the conditions for PV appear particularly attractive," said Chris Sunsong, Solarbuzz analyst.

Mexico, Chile and Brazil are emerging as market leaders in the region, driven by a combination of net-metering, renewable portfolio standards and other policies. The three countries are forecast to have almost 70% of PV demand within the region by 2017.

By the end of 2012, energy regulators across the region had received PV project applications in excess of 6,000 megawatts (MW), stimulating a healthy pipeline of new opportunities for PV component suppliers, developers and installers.

The dominant ground-mount segment is forecast to provide 60% of PV demand by 2017. However, commercial and residential segments will see increased PV adoption from 2015 onwards as PV prices continue to benefit from increased demand from rural electrification and development initiatives.

While PV fundamentals are strong, there are still obstacles to overcome in the sector. "PV connection and integration procedures are not yet clearly defined, and there are concerns about grid stability as PV contributions come online. Electricity subsidies in Mexico are low and natural gas prices in Peru are also delaying the onset of PV grid-parity for some end-user categories, while import tariffs across the region are keeping PV system costs on the high side," said Sunsong.

He concluded, "That with PV demand softening across established European countries and growing uncertainty regarding access to PV markets in the U.S., China and India, emerging PV regions are essential to sustain revenue growth targets. Having a successful market-entry strategy for Latin America is now essential for leading PV suppliers before key markets develop in the region and supply chains and purchasing channels are established."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.