Among the numerous markets in Latin America, Brazil, Mexico, Chile, Colombia, and Argentina serve as the region’s core growth drivers, with Brazil taking the lead. According to InfoLink, Latin America’s total new solar PV demand is expected to reach 25.7–31.6 GWdc in 2025, and further grow to 46.7–54.8 GWdc by 2030, representing an increase of approximately 73–82% over 2025 levels. This highlights Latin America’s strong growth potential in the global solar market; however, grid capacity, policy continuity, and financing conditions remain key factors influencing market development in the region.
Mexico: Policy Shifts to Stimulate Demand and Renew Growth Momentum
Following the inauguration of President Claudia Sheinbaum in October 2024, Mexico’s solar market has seen favorable policy shifts. In early 2025, the Ministry of Energy (SENER) and the Energy Efficiency Trust Fund (FIDE) launched a residential solar subsidy program, offering 5–8 kWp system incentives and low-interest loans for households with high electricity bills, which is expected to boost distributed solar installations.
Beyond the residential sector, the government has outlined clear expansion plans for utility-scale projects. In February 2025, the Presidency released the “2025–2030 National Electricity System Strengthening and Expansion Plan”, aiming to add over 13 GW of new generation capacity in six years, with approximately 4.7 GW from solar PV, expected to be commissioned gradually between 2027 and 2028.
Benefiting from these policies, Mexico’s 2025 solar PV demand is expected to rise to 2.5–3 GWdc, and in the long term, if key policy and funding support mechanisms continue, the market could reach 3.5–4 GWdc by 2030, solidifying its position as the second-tier growth market in Latin America.
Chile: Energy Storage as a Key Driver, Distributed and Utility-Scale Projects in Parallel
As the third-largest solar market in Latin America, Chile had a total installed energy capacity of 35.6 GWac as of April 2025, with solar PV accounting for 11 GWac, and this share continues to grow. New PV demand in 2025 is projected at 2–2.5 GWdc, potentially reaching 3.3–4.5 GWdc by 2030, indicating steady yet somewhat conservative growth.
Historically, growth was largely driven by the PMGD (Pequeños Medios de Generación Distribuida) program implemented in 2014, which provided fixed tariffs for distributed projects under 9 MW, attracting significant investment and shifting development from large desert power plants toward distributed solar. However, after years of operation, the program lacks new incentives. The 2024 Law No. 21,667, which extended residential electricity subsidies until 2027, may reduce the economic appeal of installing PV, slowing market momentum.
Additionally, transmission bottlenecks remain the main limitation for PV development. While the northern Atacama Desert offers excellent solar resources suitable for large-scale plants, insufficient grid infrastructure prevents efficient power delivery to central and southern cities, resulting in negative electricity prices and curtailment. To address this, the government committed $2 billion in 2023 to develop large-scale energy storage systems, expected to be operational from 2026. In the long term, storage and enhanced transmission capacity will be core to Chile’s PV growth.
Colombia: Institutional Incentives Accelerate Market Potential
In recent years, Colombia’s solar market has grown steadily under government-led energy transition policies, including the Energy Transition Law (Law 2099 of 2021) and the National Development Plan (Law 2294 of 2023). These provide multiple tax incentives for renewable energy (NCRE) projects, such as 50% income tax deductions for 15 years, accelerated depreciation, and exemptions from import duties and VAT.
On the utility-scale front, in 2024, the government launched energy auctions allocating 4.4 GWac of solar capacity. For distributed generation, in April 2025, the Energy and Gas Regulation Commission (CREG) passed Resolution 101,072, enabling the establishment of energy communities to promote distributed solar, targeting at least 1 GW of new renewable capacity. Consequently, Colombia’s 2025 solar PV demand is expected to reach 1.7–2 GWdc, and the Energy and Mining Minister indicated in May 2025 that certain renewable energy projects may be exempt from environmental permitting, accelerating investments and reducing administrative delays. Long-term demand is expected to grow steadily, potentially reaching 2.5–3.5 GWdc by 2030.
Infrastructure and Policy Execution: Key to the Next Growth Wave
The Latin American solar market is transitioning from a period of rapid expansion to more stable and balanced development. Some countries are facing policy shifts, cooling demand, and lagging grid infrastructure, yet overall, significant project pipelines indicate visible market demand.
Against the backdrop of energy transition and growing electricity demand, upgrading infrastructure, integrating energy storage, and deepening regional cooperation will be crucial to unlocking potential demand. By optimizing policy frameworks, streamlining permitting processes, and improving financing mechanisms, the Latin American market could experience another wave of significant incremental growth.
