German Solar Association BSW-Solar publishes study on Argentina - the next promising South American solar market
Argentinian solar market promises interesting perspectives / New government improves investment climate / Market analysis of BSW-Solar now available for free
The German Solar Association (BSW-Solar) has now published the results of its analysis of Argentina's photovoltaic (PV) market. There are many indications that Argentina will develop into a new, financially strong South American solar market with a substantial energy demand. The new government keeps on improving the framework conditions for investors from abroad and domestic investments. After the artificial exchange rate was abolished in mid-December 2015, investor confidence should now be created in order to improve investment conditions in the country and access to international funds.
Additionally, the currently very high interest charges may in the short term decline to a level typical for the region. With a strongly increasing energy demand and thus growing energy imports, the state will not be able to sustain energy subsidies as they are today. This state support will therefore be abolished in the foreseeable future, both at state and provincial level. This means that a large market for energy efficiency, but also for wind and solar energy will evolve in the short term.
"Under the new government, Argentina has the best prospects to end its economic crisis and again become a country where investments are perceived as profitable. There is no doubt that the solar industry will especially benefit from these developments," says Jörg Mayer, Managing Director of the German Solar Association (BSW-Solar). 15-year power supply contracts in US dollars are already possible in theory, however, they fail due to high interest charges for outside capital. Furthermore, due to the energy subsidies in effect, net metering so far only pays off in few provinces that have established specific promotion programmes. However, once subsidies are abolished, business may be developed right away.
BSW-Solar's new report "Enabling PV in Argentina" analyses the market framework conditions in the country and discusses possible business models. The possible business models described are power supply contracts and net metering in the provinces of San Juan, San Luis and Salta, while, exemplary, the profitability of 5 MW projects is calculated in the report.
"Enabling PV in Argentina" explains ways to raise capital and describes the obstacles for realising photovoltaic projects. Even though the PV business in Argentina is yet difficult, the country shows clear indications for a future growth. Investors, component manufacturers and project developers looking for new markets should definitely have an eye on Argentina. BSW-Solar is happy to provide its members with contact data of numerous interested local companies that were acquired at an event in Buenos Aires in mid-December 2015.