South America will add 160GWdc of solar capacity between 2025 and 2034, driven by diversification efforts, growing power demand, and favourable system economics, according to a new Wood Mackenzie report.
South America Solar PV Market Outlook 2025 provides a comprehensive analysis of the region’s solar energy landscape, power sector dynamics, 10-year solar PV installation outlook, and policy impacts across key markets.
Felix Delgado, senior analyst for Americas power & renewables at Wood Mackenzie, said: “South America’s solar PV market is expected to slow down as mature markets stabilize, but growth is expected in emerging markets.
“While there is growth in emerging markets, regional annual additions are expected to cool down as mature markets face lagging transmission infrastructure, increased curtailment, and rising transmission tariffs for small-scale solar.”
Mature markets Brazil and Chile will account for 78% of total regional installations, according to the analysis, and small-scale projects ( less than 5MWdc) will account for 48% of the total regional buildout, as distributed generation schemes remain attractive across the continent.
Regional PV installations are expected to have peaked in 2024, as both small-scale and utility-scale solar additions slow down in Brazil.
Furthermore, lagging transmission and higher curtailment hinder growth in mature markets, driving project solar + storage hybridization, particularly in Brazil and Chile.
Solar PV system economics will continue to improve, with a projected 42% reduction in regional LCOE for single-axis trackers and fixed-tilt solar PV by 2035, Wood Mackenzie added.
The report also emphasizes the role of direct C&I off-takers in driving capacity growth.
In Argentina, the corporate renewable PPA market is allowing off-takers to sign US$- Linked PPAs, acting as the main market scheme driving solar capacity additions.
Furthermore, 99% of the current solar pipeline in Brazil is set to operate under the free market. Nonetheless, regulated auctions remain critical for emerging markets like Colombia and Peru.
In the long term, the report indicates that Brazil, Chile, and Colombia are well-positioned to capitalize on growing green hydrogen demand, further driving solar capacity additions and diversifying the region’s energy landscape.
