BOSTON, Jan. 24, 2013 (GLOBE NEWSWIRE) -- As the installed cost of solar continues to decline globally, emerging markets in Latin America and the Caribbean with expensive wholesale and grid electricity prices are offering new opportunity to the solar industry. In a new report, GTM Research forecasts that markets across Latin America and the Caribbean will install 459 megawatts in 2013, nearly 400 percent more than in 2012. By 2017, annual installations are expected to be over 5,700 megawatts, bringing the market's cumulative grid-tied solar capacity to 13 gigawatts over the next five years.
Today, GTM Research publishes, Solar in Latin America & The Caribbean 2013: Markets, Outlook & Competitive Positioning, a 110-page report that includes country-specific electricity scenarios, an examination of current and potential solar policies, utility project pipelines, leading regional developers/installers and their business models, and capital expenditure for solar projects by country. The report also provides market forecasts to 2017.
FIGURE: Latin America Large-Scale Project Pipeline by Country (http://www.greentechmedia.com/content/images/reports/latam-project-pipeline.png)
In the near-term, Chile, Mexico, and Brazil have the most potential for growth, but there has also been development in other markets such as Peru, Ecuador, and Caribbean island nations. While each national market differs in energy policy, generation resources, and economic strength, they all share some, if not all, of the following characteristics: significant solar resources, high electricity prices, and growing electricity demand.
"To date, little grid-connected solar has been installed in Latin America and the Caribbean," said Andrew Krulewitz, the report's author and a Solar Analyst at GTM Research. "The current industry in these countries is primarily comprised of distributors serving the off-grid market. This lack of domestic competition is seen by solar players as an opportunity to be a first-mover in markets with tremendous growth potential. While there are few pure-play solar companies operating in these countries, there are incumbent firms that operate in similar industries that could easily transition into the solar space. As some foreign entrants have already discovered, local knowledge has proven far more valuable than solar-specific experience when operating in these new markets."
Chile has the largest solar project pipeline in the region with more than 6 gigawatts of projects announced. Of this, just 10.8 megawatts are currently operating with a further 22 megawatts under construction. While Chile promises to be the region's largest market, factors including a complex electricity market structure, solar hesitancy on the part of large offtakers, and, subsequently, a lack of financing will provide significant obstacles over the next five years.
Brazil is another market that set the solar industry abuzz in 2012. The country's electricity regulator introduced new net-metering legislation in early last year that promises to jump-start Brazil's distributed generation market. While much of Brazil's long-term growth potential lies in the distributed market, the market has not been exempt from the utility-scale solar land-grab. More than 2 gigawatts of large-scale projects have already been proposed in the country. In addition, many sub-1 megawatt projects have been announced to prepare for the upcoming 2014 World Cup and 2016 Olympics.
Mexico is the last of the three markets with potential for meaningful near-term growth. Unlike Chile and Brazil, in Mexico the framework for the rapid growth of solar, both distributed and utility-scale generation, is already in place. Net-metering was enacted in 2007, and this fact alone immensely simplifies development throughout the country. With regard to utility-scale development, independent power producers (IPPs) have been gaining a foothold, especially with regard to renewables. The national electric utility, CFE has already constructed two pilot projects and has also signed a PPA with a 46.8 MW project being developed by Sonora Energy Group.
In addition to market forecasts, GTM Research maps the competitive landscape in many of the countries presented. As many of these markets are in the early stages of development, domestic and international companies at all points on the value chain are hoping to acquire market share in anticipation of growth. Strategies by foreign developers, such as SunEdison, First Solar, and juwi, are compared to those of domestic firms, for which GTM Research has assembled extensive listings and rankings of active developers and installers. The report also identifies the firms most likely to achieve success in each national market.
FIGURE: Mexico Distributed Generation Solar Taxonomy (http://www.greentechmedia.com/content/images/reports/mexico-dg-taxonomy.png)
For more information on this report as well as solar markets in Latin America and the Caribbean, visit http://www.greentechmedia.com/research/report/solar-in-latin-america-the-caribbean-2013.
About GTM Research
GTM Research, a division of Greentech Media, provides critical and timely market analysis in the form of research reports, data services, advisory services and strategic consulting. GTM Research's analysis also underpins Greentech Media's webinars and live events. Our coverage spans the green energy industry including solar power, smart grid, energy storage, energy efficiency and wind power sectors.
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