Wood Mackenzie’s new report on the South American solar market expects 160 GW DC of new PV additions between 2025 and 2034
Mature markets like Brazil and Chile will account for 78% of this growth, but emerging markets will also expand
Distributed generation, corporate PPAs and demand for green hydrogen will be enabling factors
According to a new market outlook report for the continent by Wood Mackenzie, the South American solar PV market is forecast to add 160 GW DC of new solar PV capacity between 2025 and 2034. This growth will be led by mature markets of Brazil and Chile, accounting for 78% of total regional installations. .
Its 10-year installation outlook factors in the energy diversification efforts by various countries along with growing power demand and favorable system economics as the primary drivers of this anticipated growth.
Nevertheless, the report writers see growth in emerging markets as mature markets stabilize.
Wood Mackenzie’s Senior Analyst, Americas Power & Renewables, Felix Delgado explains, “While there is growth in emerging markets, regional annual additions are expected to cool down as mature markets face lagging transmission infrastructure, increased curtailment, and rising transmission tariffs for small-scale solar.”
Brazil, for instance, is believed to have seen its small-scale and utility-scale solar additions to have peaked in 2024, which means newer deployments can be expected to slow down going forward. Oversupply of energy and lagging transmission infrastructure hamper utility-scale’s growth, while expiring incentives, import taxes on solar modules and rising transmission tariffs impact small-scale solar.
Distributor interconnection disputes also play their part in slowing down the small-scale segment.
Brazil’s solar market will continue capacity additions under power purchase agreements (PPA) and distributed generation. 99% of the country’s current solar pipeline will operate under the free market, according to Wood Mackenzie’s estimates.
Like Brazil, Chile’s solar market too faces grid curtailment and constraints diverting vanilla solar projects to hybrid mode with the addition of storage. Delgado believes Chile will act as a testing ground for solar and storage projects for other countries with similar conditions.
Among other nations covered in the report, Wood Mackenzie sees USD-linked PPAs driving the corporate renewable PPA market and boosting solar. On the other hand, countries like Colombia and Peru will continue to need government support in terms of regulated auctions, which the analysts stress are critical for such emerging markets.
Small-scale projects with less than 5 MW DC installed capacity will be an enabler for the continent’s new solar build over the next 10 years as the report pegs their contribution at 48% of the total regional build. The growing demand for green hydrogen in Brazil, Chile and Colombia will also accelerate solar capacity additions during the period.
Wood Mackenzie also projects 42% cost reduction in regional levelized cost of electricity (LCOE) for single-axis trackers and fixed-tilt solar PV by 2035 positively influencing solar deployments in the region.
The complete South America solar PV market outlook 2025 report can be purchased from Wood Mackenzie’s website for $5,990.
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