GTM: Fast-growing Honduras usurps Mexico

Chile remains the leading Latin American PV market in 2015, with around 1 GW of PV set to be installed. The fastest growing market in the region, however, is Honduras that will increase its annual installed capacity from 5 MW in 2014 up to 460 MW this year.

GTM predicts that Latin America will realize 2.2 GW of PV in 2015.

Honduras takes second place in the GTM Latin America ranking from Mexico, which the U.S.-based market analysts expect to realize 195 MW, up from 67 MW in 2014.

Behind the Honduras boom is an bonus of US$155/MWh for arrays completed by July. As a result, Honduras currently has 349 MW under construction, reports GTM.

“Near-term growth is expected in Honduras as several large-scale projects are slated to be completed in the second quarter,” said GTM Research’s Adam James. “[By contrast] solar development in Mexico has largely been pushed back to 2016 with changes to tariffs, regulatory, and financing risk.”

The decline in value of the Mexican peso is another factor behind the market’s sluggish performance in 2015, having pushed up the local price of PV components. The falling oil price has compounded this trend, itself weakening electricity tariffs in Mexico.

While the Mexican solar market has not lived up to some previously bullish expectations, looking long term GTM maintains that by 2020 it will become the leading Latin American market. James concludes that with rising electricity demand, PV’s improving economics, the rebounding peso and likely increases in electricity rates will all set the stage for strong long-term growth.

“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 (60% of consumption) to buy power from independent power producers,” writes James in the report.

For the latest solar news from Latin America, in Spanish, head to pv magazine Latin America.