Solar Energy in Latin America: The Best Markets to Enter in 2025

Solar energy in Latin America is experiencing an unprecedented solar energy boom. With abundant natural resources, ambitious climate commitments, and growing energy demand, the region has become one of the world’s most attractive destinations for renewable energy investment.

Why Solar Energy in Latin America Is Attracting Global Investment

The renewable energy transition in Latin America isn’t just a policy goal, it’s an economic imperative. Countries across the region are reducing their dependence on fossil fuels while capitalizing on some of the planet’s best solar irradiation levels.

Investment in solar infrastructure has surged dramatically. Governments are offering tax incentives, streamlined permitting, and long-term power purchase agreements to attract foreign capital, creating a favorable environment for companies looking to expand into these high-growth markets.

Brazil Leads the Solar Energy Revolution

Brazil dominates the Latin American solar landscape. The country has become the region’s largest market, with distributed generation growing exponentially across residential, commercial, and industrial sectors.

Federal and state-level incentives make Brazil particularly attractive for market entry. Tax exemptions on equipment imports, net metering programs, and competitive financing options have accelerated adoption, while the Northeast and Southeast regions offer strong opportunities for commercial projects.

Chile Boasts Vast, Untapped Solar Energy Potential

Chile pioneered solar energy adoption in Latin America and maintains one of the region’s most sophisticated markets. The Atacama Desert provides some of the world’s highest solar irradiation levels, attracting billions in utility-scale investments.

Chile’s transparent regulatory environment reduces entry barriers for foreign investors. While the utility-scale market matures, small and medium-scale distributed generation represents the next growth frontier, supported by policies aimed at accelerating coal plant retirement.

Mexican Solar Growth Amidst Policy Pressure

Mexico’s solar sector faces a complex landscape with recent policy changes creating uncertainty for private developers. Current regulations favor state-owned utilities, but significant opportunities remain for industrial consumers seeking energy cost reduction.

Northern border states present particularly strong prospects due to proximity to U.S. markets and high manufacturing activity. Success requires understanding the latest regulatory developments and identifying projects that align with current policy priorities.

Colombia's High Potential in an Emerging Market

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Colombia has accelerated its renewable energy ambitions with competitive auctions and streamlined environmental permits. The country’s stable democratic institutions and improving business environment provide confidence for long-term investments.

Geographic diversity allows for hybrid solar-wind projects, while growing industrial and commercial sectors drive energy demand. Companies entering early can establish strong market positions as Colombia’s solar sector expands.

Argentina Offers High-Reward Solar Despite High Risk

Argentina presents a higher risk but a significant opportunity for experienced developers. Recent economic reforms and the desperate need for energy infrastructure create openings for solar development despite ongoing macroeconomic challenges.

Companies comfortable with emerging market volatility may find attractive returns, particularly in agricultural and industrial applications. Strong local partnerships are essential for navigating Argentina’s complex business environment.

Key Challenges When Entering Solar Energy Markets in Latin America

Success in solar energy in Latin America requires more than technical expertise. Companies must navigate distinct challenges that can derail even well-planned expansions:

  • Cultural and business practice differences: Relationship-building takes precedence over transactional approaches
  • Complex regulatory environments: Permitting processes vary significantly between and within countries
  • Currency volatility: Exchange rate fluctuations impact project economics and financing structures
  • Local content requirements: Many markets mandate minimum percentages of locally-sourced components or labor

Partner with Experts to Navigate Latin American Solar Markets

Entering solar energy in Latin America demands strategic insight, local knowledge, and the right connections. Unlock Latam connects you with key decision-makers across the region’s energy sector and provides the market intelligence you need to succeed. Contact us today to discuss your solar energy expansion strategy.

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