Latin America on track to install 2.7GW of solar in 2016

Latin America on track to install 2.7GW of solar in 2016

Latin America is on track to deploy a total of 2.7GW of solar photovoltaic (PV) capacity in 2016 as more countries in the region acquire public tenders, according to London-based analytics firm IHS Markit Ltd.

Chile is still the regional leader accounting for 44% of the new installations in 2016. It is anticipated to slow down over the next years because of grid constraints and power price drops.

Honduras is still the second largest market in Latin America with around 500MW of installed solar, but could be overtaken by Mexico this year.

“Recent record-low bid prices — as low as US$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.”

Argentina has already started the tendering process for renewables with the World Bank planning to guarantee 1GW of renewable power tender of which 300MW will be supplied by PV.

The IHS firm said there are also certain challenges surrounding the tender model such as delays caused by administrative barriers or developers’ wishes to wait for component prices to drop.