Post on 08-Jul-2020
Latin America PV Playbook
Executive Summary
Q2 2016 Market Update
May 2016
1
Deep insights on an emerging market
Latin America is at the global frontier of emerging solar markets. Countries like Mexico and Chile are providing regulatory frameworks for competitive PV
development while Brazil along with countries in Central America, the Caribbean and the Rest of South America is supporting gigawatts of deployment through
solar-specific auctions and more direct government support. The region is at an early stage but offers a significant opportunity due to its sizable long-term
potential and world-leading growth rates. To enable players to make the most of the region’s potential, GTM Research’s Latin America PV Playbook is the
industry's most insightful analysis of the market.
What’s in the Playbook?
• Quarterly Market Updates - The Playbook is published quarterly, providing insights into the major developments of the previous quarter. With an eye on the
future, it offers an assessment of the trajectory of the market by forecasting demand and analyzing the projects and players that will make it happen.
Recognizing that the market has numerous upside and downside risks, the Playbook also provides a scenario-based assessment of the market’s future
• Comprehensive Coverage - The Playbook’s analysis spans across market segments – residential, commercial, industrial and utility-scale, and includes a deep
focus on the major markets of Brazil, Chile and Mexico while covering countries in Central America, the Caribbean and the Rest of South America
• In-depth Project Database1 - Every quarter, the Playbook is accompanied by the Latin America PV Project Tracker which is a spreadsheet-based database of
over 1,100 projects across all the countries in the region with details on project developers, project sizes, locations, off-takers, PPA values and more
About the Latin America PV Playbook
1. Available only as part of the annual subscription
2
Mohit Anand is a Senior Analyst at GTM Research covering global solar markets. With previous experience covering demand
dynamics and business strategies in emerging markets like India, Mohit analyzes the market fundamentals, government
policies, risks, and competitive strategies that determine the success of solar players globally. Before joining GTM Research,
he participated in the early stages of growth of the Indian solar industry by setting up a solar market intelligence team,
advising project developers on new solar business models, and consulting for international solar companies on their market
success strategies. Mohit holds a bachelor’s degree in economics from St. Xavier’s College, Mumbai, a master’s degree in
international studies from the National University of Singapore, and a master’s degree in public administration from the
Kennedy School of Government at Harvard University.
1. Available only as part of the annual subscription
The research team
Manan Parikh is a Research Associate at GTM Research covering global downstream markets. Prior to GTM, his work has been
extensively research based, centering upon alternative fuels infrastructure development and Low Carbon Fuels Standard
(LCFS) policy models for the Schatz Energy Research Center and UC Berkeley in Northern California. In California, he was also
an ambassador to start-up teams within the Clean Tech Open accelerator as well as a consultant to DOE SunShot Catalyst
Award winner, PVComplete. In Washington, DC he worked on biomass policy at the American Council On Renewable Energy.
He is an alumnus of The University of Texas at Austin, where he graduated with a B.S. in Biochemistry, as well as the DC-based
Clean Energy Leadership Institute in its inaugural class.
Executive Summary – Q2 2016 Market Update
4
1,416
2,198
7,723
2.6%3.4%
9.3%
8.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
0
2,000
4,000
6,000
8,000
10,000
2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E
MW
Annual Installed PV Global Demand Share
• Latin America had a record year in
2015 installing 1.4GW, 813MW more
than in 2014
• 2016 is set to be another record year
for solar in the region with the
market growing 55% to 2.2GW
• The strengthening of the market is
reflected in the fact that the region’s
share of global demand will increase
year-on-year to peak at 9.3% in 2018
• Utility-scale auctions in Brazil, Chile,
and Mexico in which solar is out-
competing other clean technologies
are the key driver behind its strong
growth in the region
Executive Summary: Auction-led demand continues to strengthen prospects for solar in Latin America
Source: GTM Research Global Solar Demand Monitor Q2 2016
Latin America PV Demand 2010-2020E
Cumulative Forecast 2016-2020 = 27GW
2016-2020 CAGR = 37%
5
• Chile was the largest market in 2015
with 37% share of regional demand
and will remain in the lead in 2016:
The market has been driven by
merchant projects
• Mexico will be close to Chile in 2016
with 29% of regional demand share
as several grandfathered projects are
under construction now that there’s
more certainty in the market
• Brazil has a 3GW pipeline driven by
auctions but few installations: This
will change in 2016/2017 as several
projects face completion deadlines
• An auction in Peru and one planned
in Argentina position them as
markets on the rise in Latin America
Executive Summary: Chile leads regional demand but will soon give way to Mexico and Brazil
Source: GTM Research Latin America PV Playbook: Q2 2016
Latin American Markets’ Share of Regional Demand 2015-2020E
3%
14%23%
49%
28% 25%
37%
30% 12%
7%
16%18%
7%
29% 47%
28%
34% 33%
2%
1%
3%4%
7% 8%
4%
1%
2%1%
2% 1%
39%
9%
5% 4%4% 4%
3%
6%
5% 4% 6% 8%6% 9%
4% 4% 4% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2016E 2017E 2018E 2019E 2020E
Shar
e o
f R
egio
nal
Dem
and
Brazil Chile Mexico Argentina Peru Central America The Caribbean The Rest of South America
6
Brazil
Outlook: Weak• Significant downside risks from political
uncertainty and a very weak macro-economic environment make conditions weak
• Falling electricity demand and cancellation of several transmission projects needed for solar generation further weaken fundamentals
• Solar installations remain stuck because of a severe lack of financing and drastic depreciation of the Real
Executive Summary: Brazil’s outlook is weak whereas Mexico’s has significantly strengthened
Source: GTM Research Latin America PV Playbook: Q2 2016
Latin America Major Markets’ PV Outlook
Chile
Outlook: Neutral• Low spot prices have suppressed
demand: They are at their historical lowest and often negative due to high congestion at the SIC-SING interconnection point and will not recover until the new 753km Cardones-Polpaico transmission line opens
• A crash in global copper prices has contracted mining demand but copper prices are showing early signs of a turnaround and demand from the sector could rise again
Mexico
Outlook: Strong• Solar’s strong win of 74% of energy
offered in the country’s first clean energy auction held in March 2016 has boosted market sentiment and demand
• Another auction with 9TWh of energy on offer is scheduled for Sept. 2016 and solar could win 60-70% of the energy offered
• 400-500MW of additional grandfathered projects will execute given better certainty in the market from the energy transition law
7
• Auction-led demand is skewing the
market towards the utility-scale
segment as governments prefer rapid
solar competitiveness through
economies of scale
• Brazil, Chile and Mexico each have
predominantly utility-scale markets
• New markets Peru and Argentina too
are pushing utility-scale projects
• Brazil and Mexico have early stage
distributed generation markets that
will grow and push that segment’s
share of demand in the region
• Chile is the only major market that is
conspicuous in its lack of a viable
incentive for distributed generation
Executive Summary: The utility-scale segment dominates demand but the distributed generation segment will strengthen over the next years
Source: GTM Research Latin America PV Playbook: Q2 2016
Latin America Market Segmentation 2015-2020E
3% 3% 3% 3% 6% 7%5% 5% 5% 5%
8% 10%2% 2% 1% 1%
2%3%
90% 90% 91% 91%84% 81%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015E 2016E 2017E 2018E 2019E 2020E
Mar
ket
Segm
enta
tio
n
Residential (<20kW) Commercial (20kW - 1MW) Industrial (1MW - 5MW) Utility (>5MW)
8
Source: GTM Research Latin America PV Project Tracker
Regional Project Pipelines (MWdc)
Executive Summary: Chile continues to soar above the pack for installed capacity in Latin America; Brazil and Mexico make strides in projects under construction
180533
2960
Mexico
40
550
2100
Brazil
1323
3232
1500
Chile
500
128
350
Central America
100148
Peru
54 100214
Carribbean
16277
400
Rest of South America
9
Executive Summary: Enel Green Power leads the way in Latin America with over 700MWdcunder construction in key regional markets
Source: GTM Research Latin America PV Project Tracker
131
140
231
329
403
0 100 200 300 400 500
SunPower
Pattern Energy
SunEdison
Acciona
Enel Green Power
Capacity (MWdc)
Chile
27
150
350
0 200 400
Buenavista Renewables
Eosol
Fisterra Energy
Capacity (MWdc)
Mexico
270
280
0 100 200 300 400
Enel Green Power
Canadian Solar
Capacity (MWdc)
Brazil
75
0 100 200
TerraFormGlobal/SunEdison
Capacity (MWdc)
Uruguay
Top Developers with under construction pipelines in select markets
About the Report
11
Contents of the Report
1. Executive Summary 3
2. Brazil 10
3. Chile 20
4. Mexico 32
5. Market on the Rise – Argentina 44
6. Market on the Rise – Peru 48
7. Central America 51
8. The Caribbean 54
9. The Rest of South America 56
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List of Figures From the Report
Executive Summary
• Latin America PV Demand 2010-2020E
• Latin American Markets’ Share of Regional Demand 2015-
2020E
• Latin America Major Markets’ PV Outlook
• Latin America Market Segmentation 2015-2020E
• Regional Project Pipelines (MWdc)
• Top Developers with under construction pipelines in select
markets
Brazil
• Brazil Overall PV Demand 2015-2020E
• Brazil Market Segmentation 2015-2020E
• Brazil Utility Scale (projects >5 MW) PV Demand 2015-2020E
• Brazil Utility-scale Developer Rankings Q2 2016
• Developments taking place within Brazil’s PV market
• Falling value of PPA prices and rising ceiling prices in Brazil
• Brazil Distributed Generation (<20 kW-5 MW) PV Demand
2015-2020E
• Brazil Overall PV Demand Scenarios 2016E-2020E
• Brazil Residential (<20 kW) PV Demand Scenarios 2016-2020E
• Brazil Commercial (20 kW-1 MW) PV Demand Scenarios 2016-
2020E
• Brazil Industrial (1-5 MW) PV Demand Scenarios 2016-2020E
• Brazil Utility-Scale (>5 MW) PV Demand Scenarios 2016-2020E
Chile
• Chile Overall PV Demand 2015-2020E
• Chile Market Segmentation 2015-2020E
• Chile Utility Scale (projects >5 MW) PV Demand 2015-2020E
• Chile Utility-scale Developer Rankings Q2 2016
• Sistema Interconectado del Norte Grande (SING) Grid PV
Highlights
• Sistema Interconectado Central (SIC) Grid PV Highlights
• Difference in capacity awarded between the last CNE auction
and the next one
• Spot prices in Chile in SIC and SING grids
• Change in expected SING territory PV Pipeline
• Chile Distributed Generation (<20 kW-5 MW) PV Demand
2015-2020E
• Chile Overall PV Demand Scenarios 2016E-2020E
• Chile Residential (<20 kW) PV Demand Scenarios 2016E-2020E
• Chile Commercial (20 kW-1 MW) PV Demand Scenarios 2016E-
2020E
• Chile Industrial (1-5 MW) PV Demand Scenarios 2016E-2020E
• Chile Utility-Scale (>5 MW) PV Demand Scenarios 2016E-
2020E
Mexico
• Mexico Overall PV Demand 2015-2020E
• Mexico Market Segmentation 2015-2020E
• Mexico Utility Scale (projects >5 MW) PV Demand 2015-2020E
• Mexico Utility-scale Developer Rankings Q2 2016
• Total capacity of auctioned projects by developer
• Total capacity of auctioned projects by state
• IRR Estimates Relative to PPA Prices with fixed GTM Research
Assumptions
• State-level Status of Grandfathered Pipelines
• Where CENACE will award projects in the next auction
• Mexico Distributed Generation (<20 kW-5 MW) PV Demand
2015-2020E
• Mexico Overall PV Demand Scenarios 2016E-2020E
• Mexico Residential (<20 kW) PV Demand Scenarios 2016E-
2020E
• Mexico Commercial (20 kW-1 MW) PV Demand Scenarios
2016E-2020E
• Mexico Industrial (1-5 MW) PV Demand Scenarios 201E-2020E
• Mexico Utility-Scale (>5 MW) PV Demand Scenarios 2016E-
2020E
Market on the Rise: Argentina
• Argentina Overall PV Demand 2015-2020E
• Argentina Policy Evolution in Favor of Solar
• Insolation Levels in Argentina
Market on the Rise: Peru
• Peru Overall PV Demand 2015-2020E
• Auctioned capacity versus operational capacity in Peru
Central America
• Central America Overall PV Demand 2015-2020E
• Central America Market Segmentation 2015-2020E
The Caribbean
• The Caribbean Overall PV Demand 2015-2020E
The Caribbean
• The Rest of South America Overall PV Demand 2015-2020E
13
Accompanying Latin America PV Project Tracker
Current Announced
27,780 MWCurrent Contracted
6,990 MW
Number of Projects
1,125Number of Countries
30
Total Operational
1,812 MWUnder Construction
4,803 MW
Source: <Insert source>
Project Tracker Sample
Source: <Insert source>
Project Tracker Summary, Q1 2016
Purchasing Information
15
Individual Quarterly Report: $1,995
Annual Subscription - 5 reports and project database: $5,995
To purchase, visit www.latampvplaybook.com or contact:
Matthew Casey, Manager Solar Research Sales – casey@gtmresearch.com +1 617 500 6502
Zack Munsell, Research Sales Associate – zmunsell@gtmresearch.com +1 617 500 0257
Pricing and purchase options
Interested in other GTM Research products and services? Please visit www.gtmresearch.com or contact sales@greentechmedia.com
May 2016