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In the latest edition of the Latin America PV Playbook, GTM Research forecasts Honduras to install 460 megawatts of PV this year. This puts Honduras second in the rankings, behind perennial market leader Chile, which is expected to install 1 gigawatt in 2015. Mexico, Latin's America's No. 2 installer in 2014, will be bumped into third place.
FIGURE: Leading Latin America Solar Countries, 2014-2015E
Source: GTM Research Latin America PV Playbook
With 349 megawatts of utility-scale PV projects under construction despite concerns about country risk, Honduras has emerged as Latin America's 2015 surprise story. There is incentive to quickly finish projects in the Central American nation, as the first 300 megawatts of projects to connect by July qualify for a bonus tariff of $155 per megawatt-hour.
“The first quarter of 2015 has been a testament to the kind of dynamic conditions we’ve come to expect from Latin America. Near-term growth is expected in Honduras as several large-scale projects are slated to be completed in the second quarter, whereas solar development in Mexico has largely been pushed back to 2016 with changes to tariffs, regulatory, and financing risk.”
GTM Research forecasts Mexico's solar market to nearly triple in 2015, growing from 67 megawatts in 2014 to an expected 195 megawatts this year. However, James notes that Mexico's near-term market growth is stymied by a peso weakened by falling oil prices and a recent reduction in electricity tariffs. These are temporary issues, and by 2020, GTM Research expects Mexico to be Latin America's solar leader.
“Factors such as the strong foundation for electricity demand in the country, improving economics for PV, increasing access to capital, a rebounding peso, and likely increases in retail rates as Mexico’s federal electricity commission reconciles cost of service with reality all point toward a dramatic rise for solar over time,” writes James in the Playbook. “Unlike many Latin American countries, Mexico also has opportunities for PV growth across all segments -- including, notably, a new competitive wholesale market that allows industrial customers (which account for 60 percent of consumption) to buy power from independent power producers.”
GTM Research forecasts Latin America to install 2.2 gigawatts of PV in 2015.
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