Market Overview

The Renewable Energy Market in South America is experiencing unprecedented growth, driven by the continent’s abundant natural resources, policy support, international investments, and increasing demand for clean and sustainable energy solutions. Home to some of the world’s best solar, wind, hydro, and biomass resources, South America is well-positioned to lead the global transition toward decarbonized energy.

Countries like Brazil, Chile, Argentina, Colombia, and Peru are at the forefront of renewable energy development, supported by robust regulatory frameworks, foreign direct investment (FDI), and declining costs of renewable technologies. Hydropower has traditionally dominated the region’s energy matrix, but recent years have seen rapid growth in solar PV, wind energy, and green hydrogen projects.

As the world intensifies its focus on climate change mitigation, South America offers a unique opportunity for clean energy development, sustainable electrification, and green industrialization.

Meaning

Renewable energy refers to energy derived from natural processes that are replenished constantly, such as sunlight, wind, water flow, geothermal heat, and organic matter. In the context of South America, the primary renewable energy sources include:

• Hydropower: Large and small-scale hydroelectric plants.

• Solar Energy: Utility-scale photovoltaic (PV) farms and distributed rooftop systems.

• Wind Power: Onshore and offshore wind farms.

• Biomass and Bioenergy: Energy from agricultural residues and biofuels.

• Geothermal Energy: Available in regions with volcanic activity (e.g., Andes).

Renewable energy plays a critical role in reducing carbon emissions, improving energy access in remote areas, and enhancing energy security across the region.

Executive Summary

The South America Renewable Energy Market was valued at approximately USD 86.4 billion in 2024 and is projected to reach USD 138.6 billion by 2030, growing at a CAGR of 8.2% over the forecast period.

This growth is driven by:

• Supportive government policies and incentives

• International climate commitments (e.g., Paris Agreement)

• Technological advancements reducing the cost of renewables

• Private sector investments and public-private partnerships

• Regional energy integration initiatives

While challenges remain, including grid limitations and political instability in some countries, the market outlook is highly optimistic, particularly as global interest in green hydrogen and clean energy exports from South America intensifies.

Key Market Insights

• Hydropower still accounts for over 45% of electricity generation in South America.

• Solar and wind energy are experiencing the fastest growth, especially in Chile, Brazil, and Argentina.

• Chile aims to be a global exporter of green hydrogen by 2030.

• Brazil leads in bioenergy and is among the world’s top producers of ethanol from sugarcane.

• Foreign investment from Europe, China, and the U.S. continues to pour into renewable infrastructure projects.

Market Drivers

1. Natural Resource Abundance: Ideal conditions for solar, wind, hydro, and biomass projects.

2. Cost Competitiveness: Falling costs of solar PV, wind turbines, and battery storage.

3. International Climate Goals: Paris Agreement commitments and national decarbonization strategies.

4. Energy Security Needs: Desire to reduce reliance on fossil fuel imports and ensure domestic energy availability.

5. Supportive Policies: Renewable energy auctions, feed-in tariffs, and net metering programs.

Market Restraints

1. Grid Infrastructure Challenges: Weak transmission networks limit integration of variable renewables.

2. Political and Economic Instability: Policy uncertainty in some countries may deter investors.

3. Permitting Delays: Bureaucracy and slow regulatory approvals can hinder project development.

4. Financing Barriers: Small-scale developers face challenges in securing affordable capital.

5. Social and Environmental Concerns: Hydropower projects often face resistance due to land and water use conflicts.

Market Opportunities

1. Green Hydrogen Production: Chile, Brazil, and Uruguay exploring large-scale hydrogen exports.

2. Cross-border Electricity Trade: Regional interconnections to share renewable energy across borders.

3. Off-grid Solar Solutions: Solar mini-grids for rural electrification in remote and indigenous areas.

4. Corporate Power Purchase Agreements (PPAs): Growing demand from companies committing to net-zero goals.

5. Battery Energy Storage Systems (BESS): Integration of energy storage with renewables for grid stability.

Market Dynamics

• Supply Side: Dominated by a mix of national utilities, private IPPs (Independent Power Producers), and international energy giants.

• Demand Side: Driven by governments, utilities, large corporations, and energy consumers seeking lower energy costs and cleaner alternatives.

• Policy Landscape: Transitioning from state-owned energy monopolies to liberalized markets supporting competition and investment.

Regional Analysis

1. Brazil:

   • Largest renewable energy market in Latin America.

   • Dominates in hydropower and bioenergy.

   • Rapid growth in solar and wind projects, especially in the northeast.

   • Government-held energy auctions attract global players.

2. Chile:

   • Leader in solar PV and green hydrogen.

   • Over 30% of electricity from non-conventional renewable energy (NCRE).

   • Highly attractive regulatory framework for private investment.

3. Argentina:

   • Significant wind energy potential in Patagonia.

   • Strong solar radiation in the northwest (e.g., Jujuy Province).

   • National Renewable Energy Plan (RenovAr) supports development.

4. Colombia:

   • Historically hydro-reliant; now diversifying into wind and solar.

   • Focus on Caribbean coastal wind farms and Amazon solar projects.

5. Peru:

   • Rich in hydropower, with potential for off-grid renewables in Andes and Amazon.

   • Investment interest in micro-hydro and community solar projects.

6. Uruguay and Paraguay:

   • Uruguay: Near 100% renewable power generation.

   • Paraguay: Home to Itaipú Dam, one of the largest hydropower plants globally.

Competitive Landscape

The renewable energy landscape in South America is highly competitive, with global energy companies, regional players, and domestic developers all vying for market share. Companies compete on the basis of:

• Project execution efficiency

• Access to financing

• Technical innovation

• Local partnerships and compliance

Key Market Players:

• Enel Green Power

• AES Corporation

• Acciona Energia

• Statkraft

• Neoenergia (Iberdrola)

• Atlas Renewable Energy

• Canadian Solar

• Trina Solar

• Engie Latin America

• Voltalia

Segmentation

1. By Energy Type:

   • Hydropower

   • Solar PV

   • Wind Power

   • Biomass/Bioenergy

   • Geothermal

   • Green Hydrogen (Emerging Segment)

2. By End-Use Sector:

   • Utility-Scale Power Generation

   • Commercial & Industrial (C&I)

   • Residential/Rural Electrification

   • Government & Public Infrastructure

3. By Technology:

   • On-grid Systems

   • Off-grid & Microgrids

   • Hybrid Systems (e.g., Solar + Storage)

4. By Country:

   • Brazil

   • Chile

   • Argentina

   • Colombia

   • Peru

   • Others (Uruguay, Paraguay, Bolivia, Ecuador)

Category-wise Insights

• Solar PV: Fastest-growing segment, particularly in Chile and Brazil.

• Wind Energy: Strong growth in Argentina and Brazil with high-capacity onshore projects.

• Bioenergy: Dominant in Brazil due to ethanol and biomass-fired plants.

• Green Hydrogen: Emerging as a strategic opportunity, especially in southern Chile.

• Hydropower: Still dominant but facing environmental scrutiny and development saturation.

Key Benefits for Industry Participants and Stakeholders

• Long-Term ROI: Stable and predictable cash flows from PPAs and FITs.

• Environmental Impact Reduction: Contributes to global and national emissions targets.

• Job Creation: Significant employment opportunities in installation, operations, and maintenance.

• Energy Independence: Reduces reliance on imported fossil fuels.

• Social Impact: Expands electricity access to rural and off-grid communities.

SWOT Analysis

Strengths:

• Rich and diverse renewable resource base.

• Strong government commitment to clean energy.

• Competitive project costs due to favorable natural conditions.

Weaknesses:

• Inconsistent regulatory environments across countries.

• Limited grid infrastructure in rural regions.

• Project delays due to permitting and land issues.

Opportunities:

• Green hydrogen for export to Europe and Asia.

• Regional interconnections and power pooling.

• Increased FDI and public-private partnerships.

Threats:

• Political instability in some markets (e.g., Argentina).

• Environmental activism opposing large hydro or wind projects.

• Global supply chain disruptions impacting solar panels and turbines.

Market Key Trends

1. Decentralized Energy Systems: Growth in rooftop solar and community mini-grids.

2. Hybrid Renewable Projects: Combining solar, wind, and storage to optimize output.

3. Digitalization: Use of AI and IoT in predictive maintenance and grid management.

4. Sustainable Finance: Surge in green bonds and ESG-focused investment vehicles.

5. Climate Resilience: Projects designed to withstand extreme weather and environmental shifts.

Key Industry Developments

• 2024: Chile’s National Green Hydrogen Strategy advances with global investor commitments.

• 2023: Brazil surpasses 30 GW of installed solar capacity; announces new energy auction targets.

• 2023: Argentina launches RenovAr Round 4, focusing on solar and wind diversification.

• 2022: Enel Green Power inaugurates large-scale solar + battery hybrid facility in Peru.

• 2022: Colombia opens first auction for offshore wind energy feasibility studies.

Analyst Suggestions

1. Focus on Policy Risk Mitigation: Engage with regulators to ensure long-term policy stability.

2. Leverage International Financing: Tap into climate funds, development banks, and green bonds.

3. Invest in Grid Infrastructure: Collaborate with governments to modernize transmission systems.

4. Explore Local Partnerships: Work with domestic firms for faster execution and regulatory compliance.

5. Prioritize Sustainability and Community Impact: Ensure ESG compliance and local benefit-sharing.

Future Outlook

The future of renewable energy in South America is highly promising. With global demand for clean power and decarbonization solutions growing, the continent stands out as a renewable energy powerhouse. The convergence of technological maturity, resource potential, supportive policy, and global capital will propel South America into a leading role in the global energy transition.

By 2030, the region is expected to witness:

• A dramatic increase in solar and wind installed capacity

• Export-ready green hydrogen projects

• Full electrification of certain sectors using clean energy

• Digitalized and interconnected regional energy markets

Conclusion

The Renewable Energy Market in South America is entering a golden age. With a powerful combination of natural advantages, strategic investments, and political will, the region is redefining its energy future. Businesses, governments, and communities that invest in and support renewable energy today are laying the foundation for a cleaner, more resilient, and economically prosperous South America.