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Global Solar PV Market Report

Key Regional Markets


Solar PV Capacity


GDP (Current Prices) USD (2022)


GDP Growth Forecast (constant prices) (2023-2027)
Chilean Peso
Country Credit Rating (S&P)


Renewable Energy capacity (2022)
Solar PV Share in Renewables (2022)


Renewable Energy Target
Plans to convert 70% of its total consumption of energy to renewables by 2030 and becoming carbon neutral by 2050
GDP Source: IMF WEO, S&P and IRENA

Despite its historic ties to fossil fuels, Chile has accelerated its energy transition in recent years through broad- based political support, private-public partnerships and innovative green technologies. The country aims at converting 70% of its total consumption of energy to renewables by 2030 and becoming carbon neutral by 2050. The government is currently developing a Just Transition Strategy to support this goal. The Chilean energy policy has evolved dynamically in recent years in response to changing domestic and international conditions through institutional and policy reforms and the implementation of major infrastructure projects.


  • Rapid growth in the distributed generation segment owing to incentives, including liberal norms in grid connectivity and a separate price determination mechanism that guarantees stable prices
  • A surge in renewable energy investment from the private sector driven by the coal phase out policy


  • The issue of transmission bottleneck
  • Infrastructure expansion has caused delays in projects in the past and could slow expansion further in the future

Renewable Energy Mix

Source: IRENA Renewable Capacity Statistics April 2023

The country’s energy mix has been predominated by hydropower, solar and wind energy. As a result of enhanced solar deployment, the share of solar energy in the renewable mix is continuously on the rise, eating into the share of hydropower, the country’s most prominent renewable energy source. Hydropower generation in Chile has decreased due to lower water availability because of climate extremities, and community opposition. In response, the country switched its focus to solar development, which resulted in an increased share of 5% YoY over 2021.

Installed Capacity: Status and Trend

Trend in Installed Solar PV Capacity

Source: IRENA Renewable Capacity Statistics April 2023

As of 2022, renewable sources accounted for 56% of total electricity generation, with half of this generation coming from solar power and wind energy. Chile has seen an accelerated growth of solar energy, with a current installed base of 6.1GW, nearly three times the capacity in 2017. During 2017- 2022, Chile’s  solar  PV  installed capacity grew 28%, driven primarily by utility-scale projects. The sector’s growth is primarily attributed to increased private sector investment over the last few years.

The nation has also expanded its distributed generation segment through its Pequeños Medios de Generacion Distribuida (PMGD) programme. According to the National Electricity Coordinator, PMGD’s installed capacity reached 2.2GW by February 2023. Solar capacity accounted for 77% of the total installed capacity with 1.7GW.

Demand Drivers

The energy sector in Chile is going through a transformation phase as it is in the process of phasing out 28 coal- fired plants by 2040. Chile generates nearly 40% of its electricity from coal and the phase-out of this capacity trigger transformational changes in other energy-related sectors. The Chilean government and private sector have been working together since mid-2019 to decommission or repurpose coal power plants by 2040. Moreover, they have pledged not to invest in new coal-fired plants without carbon capture and storage. As of 2022, eight power plant units have been retired, with more set to be retired in the future. Such voluntary decarbonization measures set the stage for renewable energy, especially solar power generation.

The excellent solar resources in Chile have helped it to become a destination of choice for solar developers. The country receives some of the strongest and most consistent sunshine on the planet, especially in the Atacama Desert, in the north (2,400kWh/m2). Due to its aridity, irradiation, and market conditions, the Atacama Desert is among the best places on Earth for developing solar power. The country’s Northern region alone has an estimated 1,260GW of untapped solar PV potential. The available solar resource thus outstrips the different renewable energy resources, including wind energy, by a wide margin.

High-capacity factors allow energy production at a very low price, which is essential for the economic and competitive production of green hydrogen, in line with the country’s hydrogen ramp-up strategy. Chile has realized that green hydrogen could be one of its top exports alongside copper and plans to use its solar potential to expedite solar powered electrolysis. During the next 5 to 10 years, Chile will be able to produce green hydrogen for less than 2 USD/kg.

With more than 2.2GW of installed capacity, the PGMD segment has experienced rapid growth, thanks to incentives such as liberal grid connectivity regulations and a separate price determination mechanism that guarantees stable prices. The trend is expected to continue, as nearly 40% (2.3GW) of total PV projects under construction belong to this segment. To facilitate more such systems, in April 2023, the Chilean National Energy Commission (CNE) announced the start of the public consultation process for the draft modification of the technical standards for connection and operation of PMGD in medium voltage facilities.

Market Opportunity

Bloomberg New Energy Finance Climatescope 2022 report highlights Chile as one the most attractive emerging market for renewable energy investment. After achieving its goal of generating 20% of its energy from renewables by 2025 five years early, the country aims to generate 40% by 2030. Chile’s coal phase out policy is driving a surge in renewable energy investment from the private sector, and opportunities are multiplying. Chile’s clean energy sector has attracted US$20.8 billion of investment in the past seven years, mainly due to its well-structured electricity sector. This sector offers, for example, renewable energy auctions for standardized PPAs denominated in US dollars, as well as the option of developing bilateral contracts with large consumers outside the regulated market.

Chile’s success to date can be attributed to its innovative auction process, supported by regular tenders and a thriving PPA market.  In August 2022, Chile’s  national energy commission CNE awarded 777GWh/y of new supply for regulated electricity clients at an average price of US$37.4MWh/y. The plan is to allocate 5,250GWh/y, for 15 years starting in 2027. This means clean energy developers will have attractive opportunities to participate in the future tendering rounds when the remainder will be sought. Notably, in the latest auction, efficient prices for renewable technology with energy storage had been obtained.

The decarbonization of Chile’s mining industry would be an important step in transitioning to a low-carbon economy. Signing power purchase agreements with major power providers is a more straightforward route for mine projects with grid connections. Currently, 16 mining companies have signed clean energy supply contracts, while four have their own non-conventional renewable energy projects. Usage of renewable energy in mining has increased from 3.6% in 2019 to an astounding 47.5% in 2022 and is further estimated to reach 49.2% by 2030. The goal is likely to  be surpassed by long shot at current growth rate.

In order to address the issue of transmission bottleneck Government has taken several steps recently. In November 2022, the congress approved a bill encouraging investments in energy storage and electromobility to alleviate congestion in power transmission. Standalone storage projects will be able to receive payment for power they inject into the grid under the bill. Also, electric vehicles will have access to the power market and vehicle owners would be remunerated for injecting electricity into the grid. The National Electricity Coordinator (“NEC”) also announced its electrical expansion proposal for 2023 in January. The proposal consists of 23 projects totaling $279 million in investment value.


Source: BNEF Global PV Market Outlook
Note: The above data, as sourced from BNEF, are based on a ‘low’ investment scenario

The government’s efforts to expand transmission and storage infrastructure have boosted investor interest in the renewable sector. BNamericas data predicts Chile to be the fastest growing Latin American country for renewable energy projects in 2023. A total of 9.2GW of renewable power projects (excluding hydropower) are expected to be built, up from 6.1GW in 2022. According to projections, solar energy will contribute 5.9GW, compared to 4.5GW in 2022, representing 64% of the total capacity for 2023. Capital expenditures on Chile’s  renewable  energy  projects are expected to reach US$7.95 billion.

The two biggest projects in the region are 1.2GW ERNC Antofagasta complex and the 862MW Terra Energía renewable energy park, attracting an investment of $874 and $750 million respectively.

Rapid growth in renewable deployment poses a significant challenge in the form of grid curtailment. Considering most high solar irradiance locations are remote and desert regions, it is imperative that the energy generated from the powerplants located in those regions are transferred to the places where energy demand is greatest. Infrastructure expansion has caused delays in projects in the past and could slow expansion further in the future. Therefore, for Chile to do justice to its true renewable potential, policy level support for critical infrastructural requirements such as power transmission is absolutely necessary. There is, however, a new 1,500km HVDC power line due to enter service by 2028. The USD$1.4b transmission line would relieve pressure between the north where the electricity is being generated and the central region where it can be used.

A viable solution to the shortfall involves investing in batteries that store production at night so spills and waste can be avoided. There are considerable amounts of projects in the pipeline (2GW+) that have battery storage attached to them. In addition, a substantial number of projects are pure play batteries that require legislation adaptations so that their electricity can be sold in Chile. There is hope that the new laws will give investors enough confidence to potentially attract more investment into battery solutions.

While enabling policy and regulatory measures such as the bulk capacity auctions help sustain the momentum, the growth rate remains muted for a lack of comparable support to other leading PV markets worldwide. At the same time investors will be watchful for the response to the upcoming auctions. The role of battery storage will be increasingly crucial for the upcoming renewable powerplants to operate at their full potential.