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The mature markets of Brazil and Chile will account for 78% of total installations, and small-scale projects (<5 MW) will account for 48% of total construction in the region. In its latest report on the South American solar photovoltaic market , South America Solar PV Market Outlook 2025, consultancy Wood Mackenzie has revealed that the region will add 160 GW of photovoltaic (DC) capacity between 2025 and 2034, driven by diversification efforts, growing energy demand and favorable system economics. Key findings from the report include that mature markets Brazil and Chile will account for 78% of total regional installations. However, the South American solar PV market is expected to slow as those mature markets stabilise. Regional PV installations are expected to peak in 2024 as small-scale and utility-scale solar additions slow in Brazil. However, growth is expected in emerging markets such as Colombia and Uruguay. Felix Delgado, senior analyst for Wood Mackenzie’s power and renewables sector in the Americas, attributes this “cooling” in annual additions “to a lagging transmission infrastructure, an increase in discharges and rising transmission rates for small-scale solar.” Small-scale projects (<5 MW DC) will account for 48% of total construction in the region as distributed generation plans remain attractive across the continent. Transmission delays and further curtailment hamper growth in mature markets, driving hybridization of solar + storage projects, especially in Brazil and Chile. The economics of solar PV systems will continue to improve, with a projected 42% reduction in regional LCOE for single-axis trackers and fixed-tilt solar PV by 2035. In the long term, the report indicates that Brazil, Chile and Colombia are well positioned to capitalize on the growing demand for green hydrogen, further driving solar capacity additions and diversifying the region’s energy landscape. Outlook for Brazil and Chile Brazil, the regions largest market, is experiencing a slowdown in solar additions following a recent expansion of renewables driven by the expiration of incentives. Specifically, according to the consultancys forecasts, Brazil will not reach 15 GW this year, and its installation rate will be around 10 GW until 2031, when it will grow again, but without reaching the installation rate recorded in 2024. Utility-scale solar faces an environment of power oversupply and delayed transmission infrastructure. Meanwhile, small-scale solar faces rising transmission tariffs, increased import taxes on solar modules, and interconnection disputes among distributors. However, capacity additions will continue to be driven by power purchase agreements (PPAs) in the free market environment and distributed generation installations. Chile, for its part, will remain at similar levels except for the years 2026 and 2027, when its installation level will decrease. It also faces similar challenges with curtailment and grid restrictions, which pushes the portfolio of solar photovoltaic energy projects towards hybrid projects. “The transition to solar-plus-storage projects in markets like Brazil and Chile is a critical step forward,” Delgado added. “Chile is paving the way for storage adoption in the region and serves as a testing ground that highlights the challenges and solutions available to countries with already high penetration of renewable generation.” PPAs in Argentina The report also highlights the role of direct C&I offtakers in driving capacity growth. In Argentina, the corporate renewable PPA market is allowing offtakers to sign US-linked PPAs, acting as the main market scheme driving solar capacity additions. In addition, 99% of the current solar portfolio in Brazil is planned to operate in the free market. However, regulated auctions remain critical for emerging markets such as Colombia and Peru. |
