[Industry News] Photovoltaic trends and prospects in Latin America

Latin America, which has abundant sunlight resources, is gradually becoming one of the focuses of the world. With the advancement of science and technology, policy support and the momentum of energy transformation, photovoltaic technology is expanding at an eye-catching rate.

The current situation and development of major demand countries in Latin America

1. Brazil

Brazil is located near the equator, and its abundant sunshine gives it a better development advantage in the photovoltaic field. In recent years, it has become the market leader in Latin America. It is predicted that the demand this year will fall at 16.3-17.5 GW, and it will occupy about 65% of the demand in the Latin American market. share. In terms of photovoltaic development, the construction of distributed projects is more enthusiastic than centralized projects. As of October 2023, the installed capacity of distributed projects has reached 23.8 GW, while the installed capacity of centralized projects is about 10.4 GW.
2. Chile

Chile is rich in renewable energy, and low-carbon energy used to be dominated by hydropower. Recently, in order to reduce dependence on imported energy and with rising electricity costs, the government has vigorously promoted renewable energy policies. Coupled with the country’s geographical environment and climate advantages, photovoltaics have gradually become an indispensable source of electricity in the country. The total installed capacity as of August 2023 is 32.5 GW, of which 8.1 GW is photovoltaic, accounting for 25% of the total installed capacity. It has now become the largest source of electricity. It is expected that the overall photovoltaic demand will reach 3.3-3.8 GW this year.

At this stage, most of the projects built in Chile are large-scale ground-mounted photovoltaic projects, mainly located in the Atacama Desert. Even so, Chile is currently promoting the construction of small distributed projects under the PMGD (Pequeños Medios de Generacion Distribuida) policy. For projects smaller than 9 MW, the government will sign agreements with fixed electricity prices to avoid risks caused by fluctuations in spot electricity prices. In recent years, Chile has gradually moved from large-scale desert photovoltaic power stations to distributed development.

3. Mexico

As one of the top three demanding countries in Latin America, Mexico’s photovoltaic demand this year is estimated to fall at 1.7-2 GW. As of the end of 2022, 68.8% of Mexico’s power generation structure comes from fossil fuels and 31.2% comes from clean energy. The overall installed electricity capacity reached 92.5 GW, of which photovoltaic installed capacity accounted for 6.5 GW.

The Mexican government also promotes many related policies in photovoltaic development. For example, in 2014, in order to strengthen the use of clean energy, the government issued clean energy certificates (CELs) to power generators. Each CEL corresponds to 1 MWh of renewable energy power generation, and power generators need to comply with the clean energy quota stipulated by the Mexican energy department SENER (Secretaría de Energía) and provide a corresponding number of CELs. If they do not meet its quantity standards, they must Facing the problem of fines, many renewable energy power generators will trade CELs in the market to meet the government’s requirements for clean energy and at the same time drive demand in the photovoltaic market. In addition, in June 2018, Mexico’s Federal Ministry of Finance and Executive Yuan announced the cancellation of the 15% import tariff on photovoltaic modules. This regulation is more conducive to the construction of centralized projects. Coupled with the previous net metering system, it has also promoted the development of residential buildings in recent years. , installation willingness of small and medium-sized enterprises.

Latin American photovoltaic market prospects

Looking to the future, photovoltaic development in Latin America is likely to grow slowly. It is predicted that demand next year will be slightly lower than this year. The Brazilian market next year will be relatively pessimistic, and its market performance will directly affect the overall trend of photovoltaic in Latin America. It is expected that in 2024 Overall demand will dip slightly to about 22-25.2 GW.

With the economic development and population increase in recent years, the energy demand of Latin American countries is gradually rising, and the demand for renewable energy is becoming increasingly urgent, especially in Brazil, Mexico, Chile and other countries, whose abundant sunlight resources are more important for the photovoltaic belt. has great potential and attracts the attention of investors. Despite this, the Latin American photovoltaic market still faces multiple challenges. For example, financial problems have always been one of the factors restricting the development of photovoltaic projects. At the same time, insufficient power grid construction and energy storage technology have also affected photovoltaic power output. Overall, although it is still full of challenges, there is ample room for development. In addition, there are still many projects to be built, and demand is still visible to a certain extent. It is expected that in the future, through active capital investment, as well as the promotion of relevant policies and financing thresholds With the reduction of the cost or the optimization of the approval process, it can bring a significant increase to the photovoltaic demand in Latin America.