Central America to reach 1.5 GW of PV in 2018 - IHS

Sep 11, 2014 - Central America will install around 1.5 GW of solar photovoltaic (PV) plants between the start of 2013 and the end of 2018, with 81% of the total to be built in 2016-2018, industry researcher IHS Inc (NYSE:IHS) projects.

The solar market in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama, the six countries in the region, will expand rapidly thanks to a couple of government tenders and the fact that more and more foreign PV developers are exploring opportunities in Central America. The expected 1.5 GW are quite impressive when compared to the region’s total PV capacity of 6 MW in 2013. For 2014 the forecast is for 22 MW of total installations, followed by 243 MW in 2015.

Already there is a 1.3-GW pipeline of utility-scale projects in the region and half of these have power purchase agreements (PPAs) as a result of increased policy support. This pipeline is set to expand further, IHS says, with the upcoming capacity auctions.

At present, some 70% of Central America’s power is renewable, mainly coming from hydropower plants (HPPs). Josefin Berg, senior IHS analyst for solar demand, points out that thermal generation is also gaining popularity through the use of oil, coal and gas. To limit the reliance on fossil fuel and avoid future volatility in electricity price, governments in the region have started supporting the controlled deployment of renewables. One example is El Salvador which awarded 94 MW of solar contracts in a 2014 tender that initially targeted only 60 MW. The three winning projects offered prices of between USD 102 (EUR 79) and USD 123 per MWh. Guatemala and Honduras policy makers have also turned to large-scale PV projects.

The market intelligence firm noted that the long-term deployment of solar and other power-generation sources depends on the rollout of the SIEPAC project for the interconnection of the power grids of the six countries.

(USD 1 = EUR 0.773)

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