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THE POTENTIAL, OPPORTUNITIES AND
CHALLENGES FOR PHOTOVOLTAIC GENERATION IN
LATIN AMERICAN AND CARIBBEAN COUNTRIES
POTENCIAL, OPORTUNIDADES Y DESAFÍOS DE LA GENERACIÓN
FOTOVOLTAICA EN LOS PAÍSES DE AMÉRICA LATINA Y EL CARIBE
Aldren Vernersbach1
Recibido: 21/11/2024 y Aceptado: 12/10/2025
1.- aldren.vernersbach@gmail.com
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La transición energética es un objetivo global para mitigar los efectos del cambio climático, derivado de
las emisiones contaminantes, principalmente de la industria energética. Esta transformación implica un
desafío económico y tecnológico, pero también genera oportunidades de desarrollo basadas en todo
el entramado industrial-tecnológico que requiere la expansión de la generación de energías renovables.
Ante este panorama de posibles benecios económicos derivados de la descarbonización, este trabajo
busca comprender el panorama del sector energético en América Latina (AL), la evolución del uso
de fuentes renovables en la región y las políticas especícas para la generación solar fotovoltaica, en
particular las de carácter industrial, con especial atención a Brasil, Chile y Argentina. Entre los resultados,
la investigación demostró que no existen políticas industriales amplias y consolidadas enfocadas en el
desarrollo de componentes para la generación solar fotovoltaica en la región. Las iniciativas encontradas
se centran en el estímulo mediante incentivos scales y la importación de estos componentes. Por lo
tanto, estas políticas para la adopción de fuentes fotovoltaicas y el nanciamiento para la adquisición
de equipos determinaron la conguración del sector en la región, que es principalmente importador de
equipos. La excepción es Argentina, que tiene una política de creación de un polo tecnológico para la
fabricación de componentes en el segmento de energías renovables, incluyendo módulos fotovoltaicos.
The energy transition is a global objective to mitigate the eects of climate change, resulting from
pollutant emissions, mainly by the energy industry. This transformation implies an economic and
technological challenge, however, it also creates opportunities for development based on the entire
industrial-technological apparatus that the expansion of renewable energy generation requires. Given
this scenario of possible economic benets arising from decarbonization, this work seeks to understand
the panorama of the energy sector in Latin America (LA), the evolution of the use of renewable sources
in the region and the specic policies for solar photovoltaic generation, notably, the of an industrial
nature, focusing on Brazil, Chile and Argentina. Among the results, the research showed that there are
no broad and consolidated industrial policies, focusing on the development of components for solar
photovoltaic generation in the region. The initiatives found focus on stimulus via tax incentives and
the import of these components. Thus, such policies for the adoption of photovoltaic sources and for
nancing the acquisition of equipment determined the conguration of the sector in the region, mostly
importing equipment. The exception is Argentina, with a policy of creating a technological hub for the
manufacture of components in the renewable segment, including photovoltaic modules.
PALABRAS CLAVE: Estabilización de precios, Recursos combustibles, Recursos energéticos, Política
energética, Economía energética, Abastecimiento de energía, Política scal
KEYWORDS: energía solar fotovoltaica; América Latina; transición energética; política industrial; ca-
dena de valor.
Resumen
Abstract
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1. INTRODUCTION
Climate change due to global warming is a
contemporary challenge, positioned at the heart
of society’s discussions. The goal of limiting global
warming to 1.5º by 2050 is an objective agreed
upon between several nations, consolidated
in the Paris Agreement in 2015. This search for
a new economic model that is environmentally
sustainable has promoted changes in several
economic sectors, particularly in segments that
cut across the economy, such as the energy
sector. In this context, the energy transition is one
of the means of curbing climate change, through
the decarbonization of the global energy matrix,
replacing energy sources of fossil origin with
renewable sources, such as photovoltaic, wind,
hydroelectric and biomass.
The challenges for this transformation to be
carried out involve the entire planet and require
multifaceted policies. However, the dierent
energy prole of each continent and each country
gives particularities to this process. Therefore,
the inclusion of renewable sources in the energy
generation matrix is peculiar to each region and
nation, given the varied opportunities arising from
dierent types of energy sources to advance the
reduction of emissions and geographic, political
and regulatory barriers. present in each location.
Thus, each region and each nation has a challenge
for sustainable transition, with specicities
regarding (i) their emissions, (ii) the current
conguration of their energy matrices – which
indicate the dimension of change –, (iii) possible
transformation trajectories and (iv) opportunities to
take advantage of this process in socioeconomic
development strategies.
Given the complexity and diversity of contexts
for the energy transition in each region of the
world, as well as the urgency to focus on areas
where decarbonization is promising, in this report
the focus of the research is Brazil, Chile and
Argentina. The objective is to build an overview
of the development of renewable sources,
focusing on photovoltaic solar generation, trying
to demonstrate the evolution of this source, the
scenario of the segment’s production chain in
the region and the policies aimed at expanding
the use of this source and promoting economic
development based on sustainable energy
transition.
Since the beginning of the development of
the photovoltaic market, around 945.4 GW of
photovoltaic power plant capacity has been
installed globally, of which approximately 70%
has been deployed in the last ve years. In the
segment’s development trajectory, a growing
number of markets began to contribute to the
expansion of installations globally, resulting in
2021 reaching a record for new countries installing
a signicant number of solar panels in their
territories. The uses of solar energy at the beginning
of this century focused on heating and cooling
buildings, generating electricity (concentrated and
distributed) and converting energy for industrial
processes (HIDALGO, NODAL, BORGES, 2019).
2. THE PHOTOVOLTAIC SOLAR ENERGY SEGMENT
The IEA PVPS (IEA Photovoltaic Power Systems
Programme) group of countries represented 753
GW of this installed capacity globally (IEA, 2022b).
In the case of the Americas, considering the
entire continent, in 2021, the amount of around
40 GW in photovoltaic solar panel installations
was recorded and a total accumulated capacity
of 164 GW (Graph 1). Although the largest portion
of this capacity is installed in the United States,
several countries have stood out in increasing
panel installations in the center and south of the
continent, with emphasis on Chile, Honduras,
Mexico and Brazil (IEA, 2022b).
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Photovoltaic power generation is developing in
the Americas mainly through tenders and in the
centralized grid-connected model, except in
the USA. It should be noted that instability has
characterized the development of photovoltaic
generation in most countries in recent years,
with stop-and-go policies in Canada, Honduras
and Mexico, for example. However, it is worth
mentioning that the market was very dynamic
in 2021 in Chile and Brazil, with prospects
for development in several Central American
countries, such as Costa Rica and Guatemala
(IEA, 2022b).
In the particular case of Latin America and the
Caribbean, photovoltaic solar energy generation
is still in an expansion process, therefore, among
Source: IEA (2022b)
Source: Cepal (2022)
the installed capacities of renewable sources
most used on the continent to generate electricity,
it is noted that hydroelectric power plants are still
the majority, accounting for 43.1%, photovoltaics
accounts for 4.4% (Graph 2). When analyzing
the panorama of generation capacity in LAC, it is
observed that, in 2021, the region’s photovoltaic
solar capacity grew 44%, with a total of 9.6 GW
added in the year. Market expansion was much
higher than that recorded in the previous two
years. In 2019 and 2020, advances were 15%
and 26%, respectively (SOLARPOWER EUROPE,
2021).
Still in terms of accumulated capacity, the continent
had more than 30 GW of solar at the end of 2021.
The number is almost four times greater than that
Graph 1 – Evolution of photovoltaic panel installations by segment | Americas 2011-2021
Graph 2 – Proportion of installed capacity to produce electrical energy by source | Latin America and the Caribbean 2020
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recorded at the end of 2018 and 40 times greater
than the installed power in 2015. Therefore, such
Data indicates that the trend is for great growth in
photovoltaic generation capacity (SOLARPOWER
EUROPE, 2021). Currently, four nations lead the
solar market in Latin America: Brazil, Mexico, Chile
and Argentina. Together, these countries account
for around 90% of the region’s photovoltaic
capacity, with all having already surpassed the 1
GW capacity threshold. Furthermore, there is a
projection of annual growth of 52% in 2022, with
14.6 GW added (SOLARPOWER EUROPE, 2021).
Highlight must be given to the case of Brazil,
whose installation of new photovoltaic panels
reached 5.7 GW, leading to an accumulated
market of 13.7 GW in 2021. After years of limited
development of the photovoltaic market, Brazil
appears today as one of the main global players,
demonstrating their potential much higher than
the levels achieved until 2021 (IEA, 2022b).
Specically in the case of distributed generation,
Brazil is among the 10 countries with the greatest
capacity expansion in 2021, having added 4.16
GW in this segment (Table 1).
Chile is also a prominent case in LAC, being
among the 10 countries with the most photovoltaic
installations in the world, having installed 2.7 GW in
2021, which indicates great market development
in the country. Furthermore, it is pointed out that
Source: Cepal (2022)
Source: Cepal (2022)
Brazil and Chile must support the expansion of
photovoltaic sources in LAC. For the region, it is
projected that in 2026 annual installations could
reach 30.8 GW (SOLARPOWER EUROPE, 2021).
Table 1 – Top 10 countries with panel installations | Distributed generation 2021
Table 2 – Top 10 countries with accumulated capacity in panel installations | Distributed generation 2021
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The expansion of the solar PV supply chain
has outpaced rapid demand growth over the
past decade, with crystalline silicon technology
dominating the market at more than 95% of
installed capacity over the past ve years. At the
end of 2021, global capacity for manufacturing
wafers, cells and assembling modules exceeded
demand by at least 100% (IEA, 2022a).
In this trajectory of sectoral growth, economies
of scale and continuous innovation throughout
the supply chain have allowed sharp drops
in manufacturing costs at all stages of the
production process in the segment. As a result,
module prices have fallen by more than 80% in
the last decade and solar photovoltaics have
become the most aordable electricity generation
technology in many parts of the world. It should
be noted that the costs of electricity generated
from photovoltaic solar energy have fallen by 82%
between the years 2010 and 2019 (HIDALGO;
HERNÁNDEZ, 2021). In 2021, the average selling
price of modules increased for the rst time – by
around 20% compared to 2020 – due to higher
commodity and freight prices.
3. THE GLOBAL PHOTOVOLTAIC EQUIPMENT CHAIN
It should be noted that, in the last decade,
a major geographic change has occurred in
the manufacturing capacity of equipment for
generating photovoltaic solar energy and its
production. China further strengthened its
leadership position as a manufacturer of wafers,
cells and modules between 2010 and 2021, while
its share of the global market capacity to produce
polysilicon almost tripled. Thus, the country’s
participation in all links of the photovoltaic
chain exceeds 80%, more than double its 36%
participation in the implementation of this type
of energy. Therefore, China currently signicantly
dominates all segments of the solar photovoltaic
source chain (IEA, 2022a).
In all countries except China, demand for solar
photovoltaics is above equipment manufacturing
capacity, from polysilicon availability to module
production. By the end of 2021, the annual
manufacturing capacity of photovoltaic-grade
polysilicon reached 750,000 tons, which should
be enough to manufacture about 250 GW of
crystalline silicon modules. In this scenario, China
produced around 80% of the polysilicon used
for solar PV modules in 2021, with the remaining
In terms of accumulated capacity in distributed
photovoltaic generation, Brazil is the only Latin
American country present in the ranking of nations
with the largest capacities from this energy source
segment. The country is in 9th place, accumulating
9.08 GW in photovoltaic installations. Even so,
Brazil and the other countries in the ranking
have a capacity far removed from that recorded
by China, which in 2021 reached 108.22 GW of
accumulated capacity in solar panels (Table 2).
In other countries, such as Argentina, progress has
been seen in installed capacity as of 2021. It is also
noted that several other countries in Latin America
and the Caribbean have established support
programs for the development of photovoltaic
electricity, with an increase in the number of power
plants that are connected to the grid, mainly in the
Dominican Republic, Ecuador and El Salvador,
followed by Uruguay and Panama (IEA, 2022b).
In the case of photovoltaic energy, the expansion
of distributed generation (produced in small units)
and large solar parks creates a potential industry,
expanding and with technological complexity
as eciency improvements are an objective for
the sector. Therefore, opportunities to internally
develop niches in this segment need to be
identied and taken advantage of by industries
in each country that is committed to the energy
transition, in addition to essential policies that
somehow stimulate the local development of links
in the production chain. The following section
deals with the photovoltaic equipment industry in
the world, in order to present an overview of the
segment’s production and its peculiarities.
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Graph 3. Global production of photovoltaic solar modules | 2010-2022
Graph 4. Net import value of photovoltaic grade polysilicon, wafers, cells and modules | Latin America and the Caribbean
2010-2021
Source: IEA (2022b).
Source: IEA (2022b).
market share divided between Germany, Malaysia
and the United States. Between 2010-2015,
China expanded its panel production capacity
twice as fast as the United States, Germany,
Korea and Japan, triggering a global oversupply,
causing polysilicon prices to fall by 70%, which led
to many producers leaving the market.
In the case of generation modules, although the
countries of North America and Europe have
signi cant manufacturing capacity, the acquisition
of solar cells occurs almost entirely from China
and countries in Southeast Asia. It should be
noted that China is also the main manufacturer
of photovoltaic module components, including
glass, EVA (ethylene-vinyl-acetate), back sheet
and junction box.
Although 38 countries have module assembly
facilities, China still accounts for around 70% of
production in 2021 – in 2010 it accounted for 50%
of production. Other important manufacturers are
Vietnam (5%), Malaysia (4%), Korea (4%) and
Thailand (2%). However, it is important to highlight
that most of the manufacturing capacity in these
countries was developed by Chinese companies
focused on exports to the United States.
Furthermore, countries with considerable module
assembly capacity, such as the United States
(4%), Germany (1%) and India (1%), produce
mainly for their domestic markets, that is, export
to meet the Global market demand is dominated
by China (Graph 6).
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With the prospect of over 300 GW of new assembly
plants in China, its market share is expected to
remain high in the medium term, even if the trend
towards productive expansion of equipment in
India, Vietnam, Thailand, the United States and
European Union. It is important to highlight that
international trade volumes of photovoltaic solar
energy depend heavily on domestic demand
in China, as the country is the largest producer
and consumer of polysilicon, wafers, cells and
modules, dictating the pace of market evolution
today.
It is worth mentioning that, between 2017-2021,
Southeast Asian module manufacturers were
responsible for 1/3 of global photovoltaic module
exports, mainly to serve the United States and
European Union markets, where Chinese modules
were subject to several commercial restrictions.
The rest of the market was dominated by China,
with its shares in India and Brazil exceeding 90%.
In Latin America, installations were records in
2022, with an increase in module imports across
the region, which, together with high prices for this
equipment in 2021, resulted in more than doubling
its net import bill that year.
In this scenario, in 2021, China and countries in
the Asia-Pacic region beneted signicantly from
higher rates of demand and prices, earning record
revenues from sales of photovoltaic generation
equipment. In view of the data presented, China’s
dominance throughout the production chain of
equipment for the generation of photovoltaic solar
energy is clear. The country has high technology,
scale and production rate, which allows them to
be the largest supplier of dierent components
to the segment globally. Therefore, in regions
such as Latin America and the Caribbean, where
there is dependence on photovoltaic technology
equipment, it is dicult for national companies
belonging to this industry to emerge to meet
local demand, given that the sector in China is
consolidated and has advantages arising from
the interconnection of the chain, with already
dominated consumer markets.
In any case, certain market niches can become
an alternative to taking advantage of the
energy transition and expansion of photovoltaic
generation for the industrial development of the
LAC region. Among the alternatives, the recycling
of panels and other photovoltaic equipment is
a segment with potential growth in nations that
import the technology. As the global photovoltaic
market increases, so does the volume of
decommissioned photovoltaic panels, so large
amounts of annual waste are predicted for the
early 2030s. The increasing waste of photovoltaic
panels presents a new environmental challenge,
but also opportunities to create value and seek
new niches for economic development.
According to IRENA data, recycling or reusing
solar photovoltaic panels at the end of their useful
life of approximately 30 years could generate an
estimated stock of 78 million tons of raw materials
and other valuable components by 2050. If fully
injected back into the economy, the value of the
recovered material could exceed US$15 billion by
2050, which gives rise to the process of reverse
logistics within a circular economy. It is noted
that sectors such as photovoltaic recycling will
be essential in the global transition to a future of
expanding the use of sustainable and economically
viable energy (IRENA, 2016).
In Brazil, the company Sun R is an example of
a company that recycles generation modules.
The process consists of dismantling, separating
materials (aluminum, glass, connectors) and
subsequent chemical treatment of the rest of the
materials, so that the silver, copper and silicon can
be extracted, ensuring the appropriate disposal
of each element. Thus, with the reverse logistics
and recycling process, around 90% of materials
can be reused and reinserted into the module
production cycle.
In addition to this specic market niche, it is possible
to envisage the possibility of Chinese companies,
dominant in the global market, expanding industrial
plants to LAC. In this way, through the installation
of industries in the segment in countries in the
region, part of the continental demand could be
met by local production. This movement could
be a way for Latin America to increase local
industry, based on the energy transition, gaining
the benets that the industrial sector is known
to provide, such as generation of qualied jobs,
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The energy transition represents a paradigmatic
change in the contemporary production
model, a challenge of transversal technological
transformation. The dynamism generated
by the implementation of this new model of
energy generation based on renewable sources
constitutes an opportunity to promote economic
development in the face of technological growth
in the area, production of new equipment and all
the infrastructural and technological adaptations
required in dierent segments. economic.
For the transition to occur, it is essential that a set
of public policies be formulated by each country,
in order to enable and accelerate change. In the
case of photovoltaic solar energy, policies to
encourage the adoption of this energy source are
essential to nance its implementation, improve
technology and reduce costs.
Brazil is a country with a large stock of natural
resources and a great potential for generating
energy from renewable sources. As a signatory
to the Paris Agreement, Brazil developed a set of
policies focused on environmental preservation
and energy transition. One of its rst and main
policies in the area of sustainability is the National
4.1. Brazil
4. POLICIES FOR THE DEVELOPMENT OF PHOTOVOLTAIC
SOLAR GENERATION AND SUSTAINABILITY IN LATIN AMERICA
AND THE CARIBBEAN
increased local income and possible intra-sectoral
and inter-sectoral technological spillovers.
It should be noted that the attraction of
companies that operate in links in the photovoltaic
equipment chain depends on national policies
for the development of solar generation and
the installation of industrial plants in the sector.
Therefore, it is important to check which policies
have been developed in LAC. Such policies can
be: (i) more general and transversal in terms of
encouraging sustainable transformation, creating
decarbonization targets and incentives for the
adoption of renewable energy sources; (ii) or
specic to the expansion of solar photovoltaic
generation.
Therefore, the following section seeks to present
the most relevant public policies in LAC aimed
at sustainability and the development of the
photovoltaic solar energy sector, focusing on the
cases of Brazil, Chile and Argentina.
Therefore, in this section we seek to bring
together the most relevant sectoral policies
with a focus on expanding the photovoltaic
solar generation segment in countries in Latin
America and the Caribbean. The mechanisms
that make up such policies are presented, as
well as nancial and scal incentives (nancing
programs, subsidies and commercial taris),
and regulatory ones, such as concession rules,
technical standards, commercial standards and
incentives based on regulations. The focus is on
the cases of Brazil, Chile, Argentina, Costa Rica
and El Salvador. Table 3 at the end of the section
brings together the most relevant policies aimed
at sustainable transformation and stimulation of
solar photovoltaic generation in the highlighted
countries and in other LAC nations.
Policy on Climate Change (PNMC), which
establishes sectoral plans for mitigation and
adaptation to climate change to consolidate a
low-carbon economy, aiming to meet targets
gradual reduction of quantiable and veriable
anthropogenic emissions, considering various
economic sectors, such as electricity (BRASIL,
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2009). The PNMC served as the basis for the
design of sectoral guidelines and normative
instruments that seek to increase sustainability
in various economic activities and diversify the
Brazilian renewable energy matrix.
Another comprehensive and relevant policy
proposed in 2021 was the National Green Growth
Program, which aimed to oer nancing and
subsidies to encourage sustainable economic
projects and activities, prioritize the granting of
environmental licenses and generate so-called
“green jobs”. This policy was not implemented,
which made it harmless in the short term (BRASIL,
2021).
Regarding the reduction of Brazilian greenhouse
gas (GHG) emissions, actions to mitigate them
in Brazil are based on sectoral plans, mainly in
agriculture, energy and forest protection. To record
and commercialize GHG emissions, the National
System for Reducing Greenhouse Gas Emissions
(SINARE) was created in 2022, which allows
monitoring progress in sustainable transformation
(OECD, 2022). The policy has a transversal bias,
as it denes plans for segments of the economy,
monitors pollution and, therefore, indicates the
necessary measures for an environmentally
sustainable economy.
Regarding policies to encourage renewable
sources, specically for photovoltaic solar
generation, there is a set of devices that
encourage the adoption of the source, nance
the acquisition of equipment and installation and
promote subsidies and tax exemptions, whether
in the format of distributed generation or of large
generation projects. In 2022, Bill No. 5,829/19
was sanctioned, which became Brazil’s new
Solar Legal Framework (Law No. 14,300/2022).
The new regulations promoted improvements
that facilitate the construction of solar plants,
increase legal security for sectoral economic
agents, granted permission for hybrid generation
systems, in addition to allowing the rebate of
credits between concessionaires and energy
licensees (BRASIL, 2022).
The new law guarantees that operating own
generation systems and new requests for access
of up to 500 kW made within one year will still
be regulated by current standards, until 2045.
Requests made after a period of one year from
the publication of the law will enter a staggered
transition model. In this model, payment of the
distribution system usage fee (Tusd) will be
made gradually, with an annual increase in the
percentage to be paid by generating companies.
The transition model also has two distinct rules:
one for requests made between the 13th and
18th months after the publication of the law; and
another for orders made after the 18th month.
In the rst case, the transition period until Tusd
is paid is eight years. In the second, the time is
shorter, six years.
Within these transition models, for each unit
of energy injected into the electrical grid, the
equivalent of 4.1% of the average low voltage
electricity tari in 2023 will be discounted. In
the following years, the discount will gradually
increase by 4.1% per year, until reaching 24.3% in
2028. These discounts are made with the aim of
remunerating the use of the electrical distribution
infrastructure, only when the electrical energy
generated by the consumer (gure of the self-
producer) is injected into the network.
In the case of consumers with new systems above
500 kW in the remote self-consumption modality
– in which case the generating system is installed
in a location dierent from that where the energy
will be consumed –, the payment for the energy
injected into the electrical grid will be 29 .3% of the
average low voltage electricity tari, from 2023 to
2028. The law also creates the Social Renewable
Energy Program (PERS), designed to nance the
installation of photovoltaic generation and other
renewable sources for low-income consumers.
The resources must originate from the Energy
Eciency Program (PEE) (BRASIL, 2023).
Another way to expand the adoption of solar
sources, making its technology cheaper, was
the inclusion of the photovoltaic panel segment
in the Semiconductor Industry Technological
Development Support Program (Padis). In this
way, the panels now have a zero rate of Import
Tax, Tax on Industrialized Products (IPI) and the
Social Integration Program/Contribution for Social
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Security Financing (PIS/Cons), until 2026 – valid
for all solar panels manufactured by companies
authorized by Padis (BRASIL, 2023).
This scal policy with a focus on technological
development indicates the eort to develop links
in the solar photovoltaic chain in Brazil. However,
the eect of the program is to reduce the costs
of importing parts and equipment for solar
panels, without promoting the national production
of components. Within the scope of nancial
policies for the segment in Brazil, the nancing
programs for photovoltaic solar generation
oered by the National Bank for Economic
and Social Development (BNDES) stand out,
which provides special credit conditions for the
import of photovoltaic equipment, with the aim
of encouraging the expansion of distributed
generation in the country.
One of its programs is BNDES Finem – Geração
de Energia, aimed at nancing the expansion and
modernization of energy generation infrastructure
from renewable sources and natural gas
thermoelectric plants. The projects to be nanced
have a minimum value of R$40 million, with a
period of up to 40 months to pay o the credit
(BNDES, 2023a). In this scope, another program
designed to implement the policy of diversifying
the use of renewable energy sources is BNDES
Finem – Baixo Carbono, created in 2018. The
program is aimed at nancing the acquisition
and commercialization of solar and wind energy
generation systems , solar heaters, electric, hybrid
and biofuel-powered buses and trucks and other
machines and equipment with higher energy
eciency rates or that contribute to reducing
greenhouse gas emissions (BNDES, 2023b).
This Brazilian public nancing policy is essential for
the photovoltaic segment, as it allows companies
to be able to acquire the technology and start
generating, selling and consuming renewable
energy from solar plants. Through both programs,
access to photovoltaic technology is expanded,
given the lower costs of nancial resources for the
construction of solar plants.
In view of the above, it is noted that Brazil has
a set of policies to encourage photovoltaic
solar generation. The existing instruments are
of a regulatory nature, establishing a normative
reference for investments in energy sources, which
includes tax incentives for the expansion of the
national solar park. Furthermore, given the current
scenario in which China is the largest producer of
solar panel components, a policy was formulated
to make the import of this equipment cheaper.
It should also be noted that nancing instruments
for solar parks are essential, enabling long-term
amortization, with lower costs. Access to nancial
resources is essential in cases where a new
technology is still considered more expensive when
compared to others that are already consolidated.
In the Brazilian case, it is clear that there is no
policy equipped with mechanisms that enable the
development of a photovoltaic equipment industry
in the country. However, it is necessary to consider
that, as production in the segment is dominated
by China, with companies producing on a large
scale and at lower costs, a strategy to create the
sector in Brazil would possibly not be viable in this
context. In this sense, policy proposals that deal
with attracting links in the chain to the country,
focusing on the development of assembly, repair
and component recycling activities, are more
appropriate.
In any case, Brazil is the country in the region
that presents a considerable set of policies with
dierent biases to increase the participation of
solar photovoltaic generation in its energy matrix.
However, there is no program that aims to increase
industrial development based on the energy
transition, notably the photovoltaic generation
value chain.
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Chile stands out as a country with a relevant set
of policies aimed at sustainability and energy
transition, having developed programs in dierent
segments of this area, based on achieving the
goals established in 2021 in its Long-Term
Climate Strategy, dening the basis for actions
environmental issues in the coming years. It is
worth mentioning that, in the search for new
energy sources to mitigate GHG emissions, Chile
is at the forefront of research for new fuels. In this
sense, the National Green Hydrogen Strategy
(OECD, 2022) was created, aiming to:
• Develop 5 GW of electrolysis capacity by
2025;
• Produce the cheapest green hydrogen in
the world;
• Position the country among the three main
fuel exporters by 2040.
As green hydrogen is a fuel of renewable origin
and its potential use in mobility is envisaged, the
development of a policy focused on enabling
its large-scale production, as well as making it
cheaper, can guarantee participation in global
trade of the product in the future. . It should be
noted that for a new technology to be adopted,
a range of instruments is needed to enable
its development, technological mastery and
economic-commercial viability of the product
generated.
Regarding the generation of photovoltaic solar
energy, through Law No. 20,571/2012, the
framework for the distributed generation of
photovoltaic energy in Chile was established.
Thus, the possibility for homes with solar systems
to generate their own energy began to be foreseen
and regulated, with the surplus being able to be
sold on the national energy market. This policy
encourages the adoption of this source and
ensures that consumers/generators benet from
the sale of their surplus and also strengthens the
participation of photovoltaics in the Chilean energy
matrix (CHILE, 2012).
4.2. Chile
This policy is similar to the new regulatory framework
for distributed photovoltaic generation in Brazil,
stimulating the production and commercialization
of renewable energy. Furthermore, as part of the
policy to increase photovoltaic generation, the
Chilean Ministry of Housing provides subsidies to
vulnerable families to implement renewable energy
systems. In this way, the policy encompasses the
aspect of just transition, by enabling lower-income
classes to acquire technology and benet from
clean and autonomous energy generation.
Within this set of policies is the Invest Chile
Program, a cooperation plan of the Ministry of
Energy (represented by the National Energy
Commission (CNE) before 2010) with the Chilean
Economic Development Agency (CORFO), to
support renewable energy projects and nance
the generation of renewable energy across the
country. program includes two subprograms
(IEA, 2022).
The rst initiative is a subprogram to enable grid-
connected non-conventional renewable energy
(NCRE) projects, through nancial incentives in the
pre-investment phase. In the period 2005-2009,
the program subsidized 50% of the total cost of
several projects, with a ceiling of US$60,000 in
pre-feasibility studies and 50% of the total cost
of pre-investment studies, with a maximum ceiling
of US$160,000. In total, 217 wind, biomass,
biogas, geothermal and small-scale hydroelectric
projects were developed based on the benets of
the program. Between 2008-2010, the CNE and
the Ministry of Energy transferred US$2 million to
CORFO, aiming to continue the program.
The second incentive subprogram was started
in 2008, supported by the transfer of resources
from the Kreditanstalt für Wiederaufbau (KfW)
development bank. The institution granted a loan
of €85 million to nance projects classied as
NCRE, providing credit facilities and low interest
rates. The contribution allowed the nancing of
19 energy generation projects from renewable
sources. It is worth mentioning that, as of 2012,
the Renewable Energy Center (CER), which is
part of CORFO, developed two new programs
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126
to subsidize pre-investment studies for NCRE
projects. The grant awarded is up to 40% of the
total costs of initial phase studies. To date, 31
projects (5 biogas plants, 1 biomass plant, 13
wind farms, 4 photovoltaic parks and 7 mini-hydro
plants) and 78 studies have beneted for a total
value of CLP 542 million.
Regarding international partnerships to
develop the energy transition and sustainability
in the country, as a member of the Pacic
Alliance, Chile participates in the Finance and
Sustainable Development Working Group, which
organizes regional cooperation for the adoption
of environmental, social and environmental
criteria. governance in the supply of nancing.
Furthermore, between 2019 and 2022, Chile
presented its milestones for green nance, social
and sustainable bonds (GSS), which are linked to
key performance indicators (OECD, 2022).
Since 2020, a scal framework has been
developed by the Ministry of Finance, with the help
of Nationally Determined Contributions (NDC) and
the United Nations Development Program (UNDP)
Support Program, to measure the eectiveness
of public and private green investments . Thus,
in 2019, Chile was the rst country in the region
to issue green bonds and, in 2022, it was the
rst nation in the world to issue bonds linked to
sustainability, currently constituting 28.7% of
public debt. To qualify and sustain these actions,
the Mesa Public-Private de Finanzas Verdes
initiative coordinates the public and private sectors
for training in relation to climate change (OECD,
2022).
In the Chilean case, it is clear that there is a public
policy framework focused on the energy transition
and sustainable development of the economy.
The country’s initiative to expand photovoltaic
generation is relevant, providing the sector with
a regulatory framework to organize activities and
also stimulate the growth of the energy market
based on this source. As it is still an expensive
technology, whose investments need to be
amortized over the long term, low-cost nancing
facilitates and accelerates its insertion into the
country’s matrix.
As in the Brazilian case, in the case of Chile, a
program was not identied with the objective of
making the local industry take advantage of the
insertion of photovoltaic energy in the matrices.
Therefore, there are no incentive mechanisms for
the solar panel components industry. Faced with
this gap, which can be justied by the great eort
to be made in the face of a dominant China in the
global production of photovoltaic equipment, the
alternative arises of developing activities related
to this industry. Therefore, an alternative for the
country is to formulate new policies focused on
market niches linked to the maintenance and
operation of photovoltaic equipment and parks.
Argentina is one of the Latin American countries
that has developed policies focused on energy
transition and sustainable transformation. In
2019, the country promoted the Law on Minimum
Requirements for Adaptation and Mitigation of
Global Climate Change and created the National
Climate Change Oce, responsible for formulating
the National Response Plan to problems arising
from environmental degradation.
In terms of mitigating climate eects, the National
Energy and Climate Change Action Plan promotes
the development of biofuel production, renewable
4.3. Argentina
energy and increased energy eciency, aiming to
reduce GHG emissions from the energy sector.
Another initiative belonging to this scope is co-
nanced with the Green Climate Fund (GCF), whose
objective is to increase investments by small and
medium-sized companies in renewable energy
and promoting energy eciency. Furthermore,
Argentina is working with EUROCLIMA+ on studies
and projects on forest management, electric
mobility and energy eciency, therefore covering
strategic segments to increase sustainability in
economic activities (OECD, 2022).
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127
The country has also developed initiatives to boost
the hydrogen market, considered an alternative to
fossil fuels. Since 2021, Argentina has been part
of the international PtX Pathways initiative, led by
the German government, to promote sustainable
hydrogen markets. As part of the International PtX
Hub, PtX Pathways supports the development
of sustainable markets for the energy transition
in Morocco, South Africa and Argentina. The
project assists ministries responsible for the
energy or economic sector in developing
allocation scenarios for PtX, including value chain
analysis, identication of business development
opportunities and recommendations to improve
the PtX regulatory framework (INTERNATIONAL
CLIMATE INITIATIVE, 2022). Furthermore,
Argentina is also working with 13 Ibero-American
countries in the “H2Transel” project to develop
hydrogen production.
In the case of photovoltaic solar energy, the country
created regulations to regulate and encourage its
expansion. Through Law No. 27,424/2017, which
addresses distributed generation, the rules for
the use of this type of energy were dened, as
well as the target for this source in the country.
Thus, through the law that underlies the policy
for the photovoltaic segment, the objective is to
reach a distributed renewable energy capacity of
1,000 MW by 2030. Furthermore, the Argentine
government created the Cluster Renable
Nacional, a cluster focused on renewable energy
sources, with the aim of increasing the supply
of clean energy generation and promoting the
local manufacturing of components such as wind
turbines, wind blades and photovoltaic modules.
The policy aims to promote 750 MW of renewable
generation in the next two years and 300
MW annually from 2024. The project has an
estimated investment for the development and
construction of plants of approximately US$1
billion. To access the resource, companies must
meet the requirement of 50% participation of
national components. In other words, this is a
case of local content policy for the renewable
sources sector, something not observed in other
countries. However, it is important to highlight that
the policy needs to be calibrated to be linked to a
scenario in which global competition with China is
very strong. Developing links in the photovoltaic
chain currently requires investments in improving
technology, given the production scale already
achieved by China.
Another initiative by the Argentine government
needs to be highlighted. In early 2016, the country
launched the “RenovAr” initiative, an auction-based
renewable energy program designed to expand
private renewable energy generation capacity in
the country. The objective of the program is to
increase the share of renewable energy production
to 8% in 2017 and 20% in 2025. The RenovAr
project seeks to help resolve the main problems
and barriers to the development of renewable
energy in Argentina. These include limited access
to long-term nancing sources and perceptions of
high country and sector risks (WB, 2018).
To further increase the condence of investors
and nanciers, the World Bank supported the
preparation of the rst RenovAr bids and provided
a guarantee of US$480 million to back certain
government obligations under the program. In
this way, support from the World Bank helped
Argentina unlock its renewable energy potential
by creating a structured market, mobilizing around
US$3.2 billion in investments.
In Round 1, 15 of the 29 selected projects, with
a total installed capacity of 590 MW, requested
a guarantee from IRBD (International Bank for
Reconstruction and Development, belonging
to the World Bank group) in the total amount
of US$295 million. For Round 1.5, 12 of the 30
selected projects, with a total installed capacity of
443 MW, requested the IBRD guarantee for a total
value of US$185 million. The total IBRD guarantee
was US$480 million for 1,033 MW covering 27
dierent projects (12 wind projects for 721 MW,
10 solar photovoltaic projects for 306 MW, four
small hydroelectric projects for 4 MW and one
biogas for 1 MW). The average guarantee period
for project nancing is 16 years (WB, 2018).
Through the RenovAR program, Argentina seeks to
expand energy generation plants from renewable
sources. It is noted that photovoltaic solar
generation beneted from this policy, with nancial
resources for project nancing in its favor. However,
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the objective of creating a photovoltaic industry in
the country based on this policy is not observed.
The program that seeks to develop links in the chain
of this source and other sustainable sources is the
National Renable Cluster, mentioned previously.
In terms of sustainable nance, the Ministry of
Economy is developing a roadmap for issuing
green sovereign debt, social and sustainability
bonds (GSS). In this sense, in 2019, the National
Securities Commission presented guidelines for
the issuance of GSS Marketable Securities and
created a Sustainable Finance Program. In 2020,
the Argentine Ministry of Economy created the
Mesa Técnica de Finanzas Sostenibles (MTFS)
as a permanent forum to develop a national
nancial strategy and strengthen the nancing
of sustainable projects in the country. Within the
MTFS framework, a joint statement was signed by
banking, insurance and capital markets regulators
to promote, nance and advance the analysis of
climate-related nancial risks (OECD, 2022).
In several countries in Latin America and the
Caribbean, public policies aimed at increasing
sustainability in the economy and the energy
transition are observed. Such policies dier in
terms of the specicity of the energy sources
whose adoption is encouraged, in terms of their
scope, duration and scope. The countries that
have the most recent policies and programs
aimed at sustainability and encouraging the
generation of photovoltaic solar energy are Brazil,
Chile, Peru, Colombia and Argentina. In the other
countries surveyed, there are older laws and
provisions encouraging renewable sources. In
certain countries there are policies embodied in
medium-term plans, such as in El Salvador, with its
Master Plan for Renewable Energy Development
(2012-2026) (2012), a plan for the development
of renewable energy that extends over 14 years.
Another example is the case of Guatemala, with
its National Energy Policy 2013-2027 (Politica
Energetica 2013-2027) and Costa Rica, with the
Electricity Generation Expansion Plan 2016-2035
(Plan de Expansion de la Generacion Electrica).
When it comes to photovoltaic solar energy,
incentive programs for its expansion are found
in Brazil, Peru, Paraguay, Uruguay, Dominican
Republic, El Salvador, Argentina and Chile. It
is important to highlight that such policies are
mostly aimed at expanding solar sources in the
countries’ energy matrix, and are not focused
on the development of the industrial chain of
their equipment. In the case of hydrogen, there
are public policies focused on the development
5. CONCLUSIONS
of technology and national production in Brazil,
Argentina, Colombia, Costa Rica and Chile. These
policies are particular because the technology is
still in the development process, seeking greater
eciency in its production, storage, transportation
and application. Thus, hydrogen programs are
characterized by their focus on innovation and the
initial stage of research, nancing and economic-
nancial incentives.
According to the policies observed for renewable
sources projects in the countries analyzed, they
were convergent with Sustainable Development
Goal 7 (SDG-7). This objective is to ensure
reliable, sustainable, modern and aordable
access to energy for all. The focus of this access
is to substantially increase the share of renewable
energy in the global energy matrix by 2030, in
addition to improving energy eciency.
The achievement of these objectives is observed
in view of the set of incentives and mechanisms
created, resulting in the expansion of the
participation of photovoltaic energy in the matrices
of Latin American countries. Despite incentives
for photovoltaic energy projects, it is clear that
there is no eort to achieve SDG 9, focused
on building resilient infrastructure, promoting
sustainable industrialization and fostering
innovation. For example, no devices were found
that aimed to develop links in the photovoltaic
chain in LAC (with the recent exception of the
case of Argentina).
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129
In this way, such policies show that they contributed
to the expansion of the photovoltaic solar energy
sector in the countries analyzed, in terms of the
adoption of this energy source. It is worth noting
that, as the policies reported for the segment did
not focus on creating links in the industrial chain
in the countries, there was, consequently, no
emergence of a photovoltaic equipment industry
in Latin America. This characteristic of the policies,
aimed at the adoption of photovoltaic sources and
nancing the acquisition of equipment, determined
the conguration of the sector in the region, mostly
importing equipment.
Added to this policy bias, China’s dominance over
the production of photovoltaic source equipment
produced a scenario with reduced space for the
national development of links in this industry.
China’s advantage in terms of cost, investments in
technology and production scale has meant that
opportunities to develop segments of photovoltaic
technology in other regions have become
restricted. Regarding this prole of policies for the
sector in LAC, as previously stated, the exception
found is the case of Argentina, with its policy to
create a hub for the development of renewable
energy sources. The country seeks to create its
own technological production nucleus, with the
aim of boosting the solar, wind and hydrogen
energy equipment industry. It should be noted that
this strategy is very recent, being in the formulation
and implementation stage by the government.
Therefore, dierent results are possible for this
public policy in the country.
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