An Overview Of The Chilean Solar Market

by Trefis Team
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Chile is growing to be an attractive solar market, owing to a combination of high electricity prices as well as abundant solar resources. Solar power is becoming a very viable option for power producers in Chile as generation costs are already quite competitive with conventional sources such as coal, gas and nuclear power plants even without being bolstered by government subsidies and incentives. [1] In this note, we look at some of the factors that are driving the growth of the Chilean solar market and what two of North America’s largest solar companies – First Solar (NASDAQ:FSLR) and SunPower (NASDAQ:SPWR) – are doing in the region.

See Our Complete Analysis For First Solar And SunPower

Chile’s Solar Industry Is Still In Its Formative Stages

Chile is one of the fastest-growing economies in Latin America, with a GDP growth rate of nearly 5.6% in 2012. [2] Demand for electricity in the country has been increasing due to a booming (and energy-intensive) mining industry as well as the rising economic empowerment of the middle class. However, supply growth has trailed demand and the country continues to be heavily dependent on imported sources of energy, and this had led to very high electricity prices. In 2012, some customers were paying an average of $0.25 per unit in the spot market. [3] Considering that Chile is rich in solar resources, with solar insolation in some parts of the country such as the Atacama region being among the highest in the world, solar power is becoming an increasingly viable option, even if subsidies are not factored in. The solar market in Chile is still in its formative stages, with total installations for 2013 expected to come in at less than 150 MW. In comparison, the United States is expected to install close to 4,400 MW this year. [4] However,the economic rationale for solar power remains very convincing, indicating that this could be a growth market for solar companies over the long run.

Challenges In The Chilean Market

Despite the compelling economics of solar power in Chile, there are a few notable bottlenecks that solar companies and project developers face. The first issue is financing. Some large power consumers are choosing to buy electricity from the spot market rather than committing to long term power purchase agreements (PPA) since they are apprehensive that the projects may not produce adequate electricity. Financiers on the other hand prefer to fund projects with PPAs in place since they guarantee more stable cash flows. [3] This problem has a lot to do with the fledgling nature of the Chilean solar industry and a lack of confidence with investors and consumers. But it is likely to be resolved as a few more large scale projects come online. Another area for concern for first time project developers is understanding the country’s complex and highly regulated electricity market.

SunPower Is Building The Worlds Largest Merchant Power Plant In Chile

SunPower has been making some headway in the Chilean solar market by leveraging its relationship with its parent company Total S.A. During the last quarter, the company announced that it would be building the world’s largest merchant power plant in Chile for Total SA, Etrion Corporation and Solventus Energías Renovables. [5] The project would be built unsubsidized at a cost of around $200 million and have a peak generating capacity of around 70 MW. Merchant power plants sell their power on the spot market rather than via PPAs. The project would be largely funded by debt from the Overseas Private Investment Corporation, which is the U.S. Government’s development finance institution. Total S.A. is one of Europe’s largest oil and gas companies, with extensive international reach. The company’s expertise and contacts are likely to be valuable to SunPower as it looks to expand further into Latin America and the Chilean market.

First Solar Can Expand Through Its Solar Chile Acquisition

First Solar acquired Solar Chile, a solar project developer based in Santiago, Chile earlier this year. Solar Chile’s projects are predominantly located in regions I, II, III, and XV in northern Chile, including the Atacama Desert region, which has the best solar irradiance in the world. The acquisition gives First Solar a portfolio of around 1.5 GW of early to mid-stage utility-scale photovoltaic power projects in Northern Chile. The company has also applied for permits to construct the $370 million 162 MW Luz del Norte project beginning in June 2014. First Solar’s Cd-Te thin-film panels perform better when compared to competing silicon based panels in extreme temperatures and this could prove to be an advantage for the company in the Chilean market. Given the high prices of electricity and strong demand for power, the firm could also have a better control over its pricing in the region.

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Notes:
  1. Green Tech Media []
  2. World Bank []
  3. Chile’s Solar Sector Is Poised For Strong Growth, GTM Media [] []
  4. SEIA []
  5. Total SA []
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  • commented 9 months ago
  • tags: FSLR SPWR
  • The World Oil Barons to lose more than their shirts and ...!

    Doctors now going to SOLAR ENERGY were the MONEY IS as always.
    More Money in solar energy then the Sick and Poor and slow in the head pill heads.

    Doctors have now formed CAUSE (Californians Against Utilities Stopping solar Energy) , what took them so long to come on board GOD Bless them for doing so..
    Solar Industry to Skyrocket with the help of Solar Shingles.
    SOLAR ENERGY SOON WILL POWER ALL OF THE EARTH

    ELECTRIC HYBRID VEHICLES & ELECTRIC VEHICLES SOON TO OUT SELL ALL OTHERS

    Energy has driven the world for over a thousand years Wind, Hydro and Solar are the oldest forms of energy giving power to all smart enough to use it.

    In the last 200 years Coal, Oil and Nuclear has given energy to many worldwide and great power and wealth to only a few. At the cost of many lives in coal Mines, Oil Spills, Radiation, Cancer and Polluting the Air and Water on all of the Earth.

    Unfortunately for the wicked there is not an unlimited amount of oil on earth. Just the same as the Forest Trees that clean the air and make Oxygen we breath and all living on earth need to Live. As some in denial are not able to recognize or ever see or live with blinders on.

    Doctors now going to SOLAR ENERGY were the MONEY IS as always.
    Doctors and Drug ceo's have been making millions prescribing drugs to many that live near or by High polluted areas. From dirty energy that hurt breathing our lungs, water we drink and harm our children and all. That we all pay for. When all on earth need is Clean Air and Water, and Clean Cities.

    Now common sense would be for all to look for a Clean Fuel Source like Wind, Hydro, Geothermal and Solar. Renewable Energy is eliminating the need for Dirty Energy Worldwide at a record pace. With SOLAR ENERGY Clearly the front runner.

    To the fear of some of the richest people on Earth. They to surprisingly are doing
    something extraordinary investing in Solar Energy. After years of many of them trying to under mine it.

    Fuel that makes energy to ship goods, or make electric for homes and manufacturing. Can transform whole nations into prosperity and wealth or poverty and economic hardships for most all. Just as taxes on taxpayers has done. For over two thousand years. Making slaves of many to the wicked and unjust few. History Lesson Roman Empire, Persian Empire now OIL Empire oh sorry OPEC.

    The Freedom to get your own Power from the Wind and Sun, Solar Energy has been there for years. Are Libraries and Schools should have been the first to have gone Solar and Renewable Energy. And why are they not? Churches are all over the Planet. They are going to Solar Energy.

    Thank GOD for the Pioneers like John Schaeffer that Started Real Goods The first and Best catalog for Renewable Energy and Dr. Addison Bain one of NASA top Scientist and Scientist Bill Young at the FSEC Florida Solar Energy Center and Monica D. Key Lindbergh for many years wrote to legislators promoting Solar and Renewable Energy and many others.

    These Pioneers helped put Wind, Solar And Renewable Energy in the Spotlight for all the World to see. One of The Greatest Scientists ever Albert Einstein Started it with a Dream that the day would come that all the World would use Solar Energy. His many years of work with the law of the "Photoelectric Effect", and showing this to the World won him the Nobel Prize in Physics. For the "Photoelectric Effect"
    Free Energy From the SUN in the heavens above.
    We still do not teach this to our young WHY?

    Very soon Hybrid Vehicles and (EV's) Electric Vehicles will out number the ones that need oil and gas to go. With the ability to recharge them at home and work from the sun.

    Tesla Motors with its new Model S electric sedan, will be one of many the World will see. Honda, Nissan, Audi,VW, BMW and Volvo are just some of the Car Companies putting into production Electric Vehicles a EV, and many more are and many are building Electric / Hybrid Vehicles. The DeLorean Motor Company has put into production 2013 a DMC-EV Electric DeLorean, that will have a body and power plant that will last you a life time. Just think you can recharge them at home and work free from the sun Solar Energy.
    Many go over 200 to 300 miles on one charge some even farther than that 300 miles +. The Tesla car Model S is the safest car on Planet Earth.


    Now to own a car that will never rust way and runs on the power from the sun that's the one for me. Very soon most all on earth will be able to get energy by recharging from the sun and wind.

    Cities that want to be Clean clean-cities.org many of them are putting in recharging stations in their heart of their downtown of their city all over the Planet Earth. Many Thanks mostly to Scientist Bill Young and his team at FSEC for their many years of work at this..

    GOD Bless You Professor Takashi Ohira and your team for the good work they are doing. To promote Clean Cities with Clean Transportation that will let some drive all day without having to stop to recharge. As Neil Armstrong would say one small step for man, one giant leap for mankind. Just one step closer to the World being powered be the Sun Solar Energy.

    Going Solar
    Germany, Denmark, Australia, Sweden, Norway, India, Nepal, Tibet, and Israeli clearly a leader in Solar companies and Renewable Energy is helping many World Wide and a long list of Nations Going Solar. Even Iran with its Archimedes Tower. At its Shiraz Solar Power Plant Iran and all the Oil Nations on Earth know the World is going to SOLAR Energy.

    Going Geothermal

    Iceland, Philippines, Kenya.....and more then 50 other Countries.

    Wind Energy in use

    More then 75 Countries

    Albert Einstein's Dream coming true
    The Earth Powered By SOLAR ENERGY.

    GOD Bless
    all that Spot Light and use Solar Energy

    GOD Bless all that have eyes to see and a brain to know that Solar Energy is the way to go.

    There is enough Energy coming from our Sun to power all our needs and then some.

    The Lord's Little Helper
    Paul Felix Schott


    P.S. Photo of

    The World's Most Leading Authority on HYDROGEN Scientist Dr. Addison Bain and Jr. Scientist in training Monica D. Key Lindbergh at the Florida Solar Energy Center. Showcasing Renewable Energy. In front of Dr. Addison Bain's Ford Crown Victoria. That started out as a Vehicle that was used in tests at
    NASA by Dr. Bain. This Vehicle was the first of its kind on Earth. Originally it was set up to run as a Bi-fuel System to run on either CNG Compressed Natural Gas or Gasoline. Dr. Addison Bain has added Hydrogen to its use. Making this Car still one of a kind on Earth. Dr. Addison Bain"s Solar covered roof Makes Hydrogen from the water. The Hydrogen is put into tanks and he fills the car up at home. Free Fuel from the SUN.

    In many cities and more added every day there are more Electric Charging Stations than gas.

    Soon Universities and Scientist around The Planet will help make it to where you will be able to drive and recharge as you go down the road, putting an end to the need to stop at all. (Wireless Power Transfer) over 100 years ago a Scientist showed this to our GOV they would not listen.

    Now wick Leaders will not be able to stop the Dream Albert Einstein, Nikola Tesla, Addison Bain and many other Scientist have know could be done and will be now done World Wide this coming year 2014. The end for the Large need of Oil.