The International Energy Agency Photovoltaic Power Systems Programme (IEA PVPS) forecasts significant growth in South America’s installed solar photovoltaic (PV) capacity. Presently, the region boasts 69 GW of PV capacity, which constitutes 18% of its total power generation. By 2034, this figure is expected to more than double, reaching 160 GW and comprising 38% of the total power mix.
South America solar growth and PV’s expanding role in the energy mix
IEA PVPS anticipates that solar PV’s share in South America’s power generation capacity will rise significantly over the next decade. Currently contributing 69 GW or 18% to the region’s total power capacity, solar PV is projected to reach 160 GW by 2034, making up 38% of the total power mix.
This growth will be fueled by a combination of utility-scale solar projects and distributed generation. The region is expected to add 91 GW of PV in the coming years, with the majority (73 GW) stemming from utility-scale installations. Distributed PV will contribute 18 GW to this expansion.
Distributed PV and self-consumption in South America solar growth
Distributed PV — encompassing rooftop solar installations and other small-scale projects — will play a pivotal role in the region’s energy transition. By 2034, self-consumption is predicted to account for 20% of distributed generation, with a total installed capacity of 14 GW.
The report also underscores the potential for solar-powered electric vehicle (EV) charging. By 2034, solar PV could support 12 GW of EV charging infrastructure, aiding in the decarbonization of the transportation sector.
Energy storage and utility-scale trends in South America solar growth
Energy storage will be a vital component of South America’s solar expansion, with the region expected to have 27 GWh of energy storage capacity by 2034. This will be crucial for managing the intermittent nature of solar power and ensuring a stable electricity supply.
Utility-scale solar will continue to dominate the region’s PV capacity, with an anticipated 73 GW of new installations by 2034. Large solar parks and other centralized solar projects will drive this growth.
Hydrogen production and South America solar growth potential
As highlighted in the IEA PVPS report, solar PV is poised to play a role in hydrogen production. By 2034, the region could have 18 GW of PV dedicated to producing green hydrogen for industrial processes and transportation.
The report notes that by 2034, 10% of hydrogen produced from solar PV could originate from dedicated installations, while the remaining 90% could be generated from plants with power purchase agreements (PPAs).
PPAs driving South America solar growth in PV capacity
PPAs are expected to be instrumental in the expansion of solar PV capacity in South America. These agreements enable solar developers to secure long-term contracts with off-takers, providing financial stability for new projects.
From 2024 to 2034, PPAs are anticipated to generate 1,551 TWh of electricity, with 70% coming from utility-scale solar and 30% from distributed PV, ensuring a consistent flow of renewable energy to the grid.
Carbon emissions impact from South America solar growth
The expansion of solar PV in South America is projected to significantly reduce carbon emissions. By 2034, the region could avoid emitting 1,177 million tons of CO2 due to increased renewable energy use. This reduction will be crucial in helping South American countries meet their climate goals.
Challenges and opportunities in South America solar growth
Although the outlook is positive, challenges remain. The IEA PVPS report indicates that the region needs to invest in grid infrastructure and energy storage to accommodate the growing share of solar PV in the energy mix. Additionally, regulatory frameworks must be updated to encourage more investment in renewable energy.
Nevertheless, the opportunities are vast. The report emphasizes the potential for South America to emerge as a leader in solar energy, with abundant solar resources and declining technology costs driving the expansion of PV capacity. For insights into solar developments in Paraguay, you can explore the Paraguay Solar Production Report, and for updates from Chile, visit the Chile Solar News Archives.
