Solar Shining Bright
BMI View: Extremely high Q114 solar installation rates and a strengthening project pipeline in Chile are testament to the country's attractive solar market, which is tempting a swathe of international investors. We have long-highlighted Chile's sizeable solar power growth potential and it appears that this is beginning to be realised. Additionally, news that SunEdison has filed an environmental impact declaration for the development of a 117MW solar power plant near Santiago reinforces our view that US solar manufacturers are well-positioned to capitalise on this rapidly expanding market.
It has been reported that solar photovoltaic (PV) capacity installations in Chile surged in Q114, with over 150MW installed during the first three months of the year - outperforming any other Latin American country significantly. Furthermore, roughly 380MW of solar projects are currently under construction across the country and the project pipeline continues to strengthen. For example, SunEdison announced in late April 2014 that it has filed an environmental impact declaration for the development of a 117MW solar power plant near Santiago. As such, we believe that Chile's substantial solar potential is beginning to be realised, in line with our long-held positive view of the market.
Our optimistic outlook for the Chilean solar market is based on a number of key fundamentals. These include robust power demand, supported by Chile's energy-intensive mining industry, strong government conviction towards power mix diversification, a mostly stable businesses environment and geographically advantageous conditions for renewable electricity generation. In fact, solar irradiation levels in the Atacama Desert are some of the highest in the world, this - coupled with the fact that electricity prices in Chile are already relatively elevated - has meant that large-scale solar projects are increasingly cost competitive compared with other energy sources. For example, Total's 70MW solar PV farm in the Atacama Desert, is the largest solar project in the world to be built without relying on government subsidy support.
|Chile Non-Hydro Renewables Capacity By Type (MW), 2013-2020|