Latin America buying more cheap solar this year

, Washington D.C. Correspondent
Source: BloombergNEF: Unlocking Investment to Triple Renewables by 2030 • The data compares investment between first halves of 2024 and 2023. The data shows change in spending, not overall spending amounts, per country.

Brazil’s voracious appetite for cheap, small-scale solar energy drove a surge in spending on renewable energy in Latin America in the first half of this year, according to recent findings from BloombergNEF (BNEF).

Growth of clean energy around the world is critical to driving down demand for fossil fuels and meeting the goal set at last year’s United Nations’ climate summit in Dubai of tripling global renewable capacity by 2030.

Cheap solar in particular is driving the growth in many markets in Latin America and across the globe, Meredith Annex, head of BNEF Global Power and co-author of the report, told Cipher.

Read Cipher’s coverage of the energy transition in Latin America here and here.

Led by Brazil, Latin America spent 64% more on solar and — to a lesser extent — wind, in the first half of 2024 than the region did during the first half of 2023. Brazil, which accounted for nearly 80% of the investment flows into the region, added cheap solar projects under five megawatts with its net-metering scheme, which allows households and commercial consumers to claim credit for power generated, BNEF said.

In contrast, Japan’s investments in renewable energy in the first six months of 2024 dropped 25% compared with the same period last year.

Annex said renewables in Japan are facing a combination of challenges, including lack of easy to develop land, trouble connecting to the grid and the government’s shifting focus.

“The Japanese government is putting a big emphasis on nuclear restarts, probably faster than we at BNEF think is possible,” she added.

China still invested far more overall in wind and solar than any other country or region in the first half of this year — $130 billion — but the country spent 4% less in the first half of this year compared to 2023. Likewise, the United States, ranked second in global renewables investments at $38.5 billion, spent about 3% less compared with the first half of 2023, primarily due to permitting bottlenecks and grid congestion.