Demand for solar photovoltaic (PV) energy across Latin America and the Caribbean is poised for explosive growth through 2017, with a forecasted compound annual growth rate (CAGR) of 45%, Mexico, Chile and Brazil are emerging as market leaders within the region, driven by a combination of net metering, renewable portfolio standards (RPS), and other policies. These 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 will have received PV project applications in excess of 6GW, 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 decline and local installers target new revenue opportunities. The off-grid sector will continue to benefit from increased demand from rural electrification and development initiatives.
While the fundamentals for PV adoption remain particularly strong and the long-term prospects are highly appealing, a variety of technical, economic and political obstacles still exist that must be overcome, according to the report.
“PV connection and integration procedures are not yet clearly defined, and there are concerns about grid stability as PV contributions come online,” NPD Solarbuzz analyst Chris Sunsong says. “Electricity subsidies in Mexico and low 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.”
With PV demand softening across established European countries and growing uncertainty regarding access to PV markets in the US, China and India, emerging PV regions are essential to sustain revenue growth targets, the report concludes.