The last year saw many emerging solar markets continue to expand and reach a greater potential for solar capacity than ever before.
According to a report from GTM Research, Latin America is the third-fastest-growing region for solar and the fifth-largest for demand, globally. Though this area of the world is still in the early stages of its solar development, more PV systems are coming online at a rapid pace. The total solar demand for all of Latin America is expected to double from the 1.3 gigawatts seen at the end of 2015 to 2.3 gigawatts by the end of 2016. GTM estimated demand for solar in the region will grow to five times the level seen in 2015 by the end of 2020.
"Latin America is in the early stages of its solar development, but is growing at a rapid pace."
Most of the solar growth in the region is centered around utility-scale projects, currently concentrated in Chile and Central America, most notably in Honduras. Chile installed 521 megawatts of utility-scale solar energy in 2015, and Central America installed 495 megawatts, with 395 megawatts in Honduras alone.
GTM noted Brazil and Mexico are "sleeping giants" of the Latin American market due to regulatory action and economic conditions that have made it more difficult for solar to gain its footing in these countries. However, Mexico is anticipated to install around 646 megawatts of solar power in 2016.
Changes for Mexico
As Bloomberg reported, industry experts are anticipating Mexico will hold many of solar's greatest opportunities for growth in the next few years. Government action ended the state's monopoly on electricity in 2013 as part of an effort to attract new investment and provide cleaner sources of energy. Mexico also set a goal of supplying 35 percent of its energy from renewable sources by 2024 and adding 20 gigawatts of clean energy to its grid within 15 years.
Additionally, as Greentech Media reported, the country offers several incentives that are attractive to solar developers, including lower labor costs, quality irradiation, a stable economy and a power purchase agreement backed by a government-owned utility.
In March 2016, the country held its first-ever private energy auction. Both solar and wind developers won 15-year contracts to produce 1,720 megawatts of power for the state-owned national utility Comision Federal de Electricidad. Though solar was initially not expected to have a strong showing at the auction, the opposite turned out to be true. Greentech Media noted 11 solar projects secured contracts worth 4 million megawatt-hours per year. Solar won 74 percent of the contracts offered, meaning the industry is expected to grow 521 percent in 2016.
"We now estimate total demand at 646 megawatts in 2016 (an additional 264 megawatts) and 1,513 megawatts in 2017 (an additional 836 megawatts) tied directly to the auction," Greentech Media reported. "That's a 104 percent jump in the forecast across the two years combined."
GTM's research revealed the northern regions of Mexico are showing the biggest support for solar, with Sonora and Chihuahua leading for self-supply and small-power producers. The deserts in these regions are attractive to solar developers due to the excellent insolation levels found there. While GTM noted many developers in the country only have one or two projects of fairly small scale usually in the same city or region, larger developers are expected to become increasingly active in 2016, which should diversify the locations and sizes of solar projects in the country.
Solar's growth in Central America
Much of Central America's solar growth can be attributed to incentives offered to developers in Honduras. The country far outpaces the rest of the region with 374 megawatts of utility-scale operational capacity online as of the end of 2015.
Much of the movement in solar in Honduras is directly linked to longstanding incentives offered by the Honduran government. Greentech Media reported Honduras first began promoting the growth of renewable energy in 2007 by offering 20-year income tax breaks for developers and waiving its import tariffs for renewable components. Its state-owned utility company, Empresa Nacional de Energia Electrica (ENEE), was also required to enter into a 20-year solar power purchase agreement with renewable energy firms under the 2007 legislation. Additionally, in 2013, Honduras began offering a $155 per megawatt-hour for the first 300 megawatts of PV capacity brought online by July 2015, which attracted many solar developers to the country.
"Longstanding incentives offered by the Honduran government are attracting solar developers to the country."
Meanwhile, other areas of Central America are seeing more modest growth. While only Guatemala and Panama currently have net metering policies that allow for residential and small commercial installations, Costa Rica has passed a new metering law but is still finalizing compensation rates offered to suppliers feeding solar back to the grid.
Larger-scale utility projects have faced challenges in smaller Central American countries where ecological conditions make installation more difficult. Although Panama offers advantageous financing and ecological conditions for solar, there are still many regulatory hurdles for developers to clear. However, according to SeeNews Renewables, smaller-scale solar projects may see additional governmental support in Panama as the country may be lifting its current 500-kW maximum capacity limit for self consumption solar systems this year. High interest in residential and commercial has incentivized Panama's Authority of Public Services to hold hearings to consider lifting the limit and giving these smaller-scale solar systems operators a way to receive credit for feeding energy back to the grid.
Despite the challenges in Central America, GTM research did show solar made significant advances in nearly all Central American countries. El Salvador and Guatemala also showed larger increases in solar capacity, with Guatemala installing 61 megawatts of solar in 2015, as compared to the 6 megawatts installed in 2014.
Solar demand in the Caribbean and South America
GTM research revealed significant governmental interest in solar in the Caribbean as fuel prices have contributed to have electricity rates. The Dominican Republic and Jamaica are leading the solar push for this area, and are the only two countries with utility-scale projects that are estimated to reach 100 megawatts by 2020.
Cuba's renewable energy output is currently modest, with The Havana Times estimating renewables contributed only 4 percent of the country's overall energy production in 2012. However, the government has announced its plans to increase its renewable energy generating capacity to 24 percent by 2030, and it is unclear how renewed relations with the U.S. may advance renewable energy development in the country.
GTM further noted Uruguay has shown the most development for solar in South America, but regulatory differences throughout the region are inhibiting consistent growth. However, with Argentina's recent passage of a renewable energy law that aims to source 8 percent of the country's energy from renewables by 2017 and 20 percent by 2025, solar growth seems likely.
Trina propels solar growth in Latin America
With its Americas HQ in San Jose, California, and regional offices in Santiago, Chile, and Mexico City, Mexico, Trina Solar now provides a global sales reach that encompasses all the Americas including the USA, Canada, Mexico, the Caribbean, Central and South America. Furthermore, Trina Solar's Latin America staff have experience working with solar in the region since the 1980s.
Trina's notable work in Latin America includes its role as a module supplier for "Marcovia Solar," a 42.5MW PV plant located in the Choluteca region of Honduras. Trina supplied more than 160,000 high-efficiency utility-grade PC14-310W modules that are generating enough energy to power 45,000 homes.
Additionally, Trina Solar is partnering with Spanish renewable energy developer Grenergy Renovables to bring up to 60 megawatts of solar projects online in Chile. Trina and Grenergy will also continue partnering in new ways to increase solar's presence in the country.
Over the last several years, Trina Solar has deployed nearly 500 megawatts of solar throughout Latin America. As the world's leading solar manufacturer, Trina is committed to powering clean energy in emerging markets where renewables can bolster local economies and create a cleaner, more sustainable future.
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