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Solar Policies in the Americas Poised to Diversify PV Growth Opportunities

While the U.S. market is undoubtedly the main driver of PV demand across the Americas region, there have been recent developments in other markets in the area that could spur demand outside of the U.S. Although some of these measures will take time to affect PV development in these countries, it confirms that strong support and interest in solar PV projects continues to exist across the wider region.

Recent developments include:

  • Canada:
    • The Ontario Power Authority has released a draft proposal to change its feed-in tariff (FIT) program.
    • The proposed revisions would reduce the FIT rate for new solar projects by 25-39%, depending on size and application type, and would also lower the domestic content requirements from 60% of the project to 22-28%, depending on the technology used in the installation. Projects above 500 kW are no longer eligible for the FIT program but can participate in (as yet) unspecified future procurement processes.
    • While this reduces support for PV installations, this announcement is positive news for the solar sector in Ontario because it confirms that the FIT program is set to continue and will start to come into compliance with the World Trade Organization’s ruling against Ontario’s domestic content requirements. Industry players hope these changes will create a more sustainable framework for support going forward.
    • The Ontario FIT is the primary driver of demand in Canada and has already driven over 0.5 GW of solar PV installations. The total pipeline of PV project applications, both approved and pending, in the province exceeds 1 GW.
    • Brazil:
      • The Empresa de Pesquisa Energetica (EPE) prompted significant interest from PV developers for its upcoming energy auction (the first auction to include solar facilities) to be held 18 November 2013.
      • A total of 109 solar PV projects, representing 2.729 GW of capacity, registered intent to bid.
      • Projects selected from the auction must be in operation by 1 January 2016.

  • Chile:
    • A revised renewable energy target has been approved in Chile.
    • The bill will require that utilities obtain 20% of their electricity, either via owned assets or IPPs, from non-conventional sources (renewable energies excluding large-scale hydro).
    • The 20% target is to be reached by 2025 with a staggered increase between 0.5-2% per year until the target is hit.

While the US will remain the dominant source of PV demand across the Americas region, Canada and emerging PV countries in South America can be expected to diversify opportunities for suppliers and project developers over the next few years. The rate at which emerging countries can stimulate gigawatt-level growth remains unclear, requiring accurate tracking of project announcements, incentive policies, regulatory rulings, and financing options.