Solar Power Generation to Increase by 35 Times in Argentina

There is a good reason why Argentina’s flag sports a shining sun. At present, Argentina only produces about 10MW of solar power, but that figure is soon about to receive a giant boost as the country plans to increase its capacity by 35 times and the government begins to hand out incentives to private companies. International developers are looking to the western regions where projects are estimated to produce over twice the amount of energy coming from solar in Germany, the world’s current market leader. The plans would assist in the efforts of President Cristina Fernandez de Kirchner to increase the amount of energy generated by renewables from 2 percent to 8 percent by 2013. In total, Argentina is hoping to produce 3,000 MW from clean energy, where 10 percent could come from solar. The country may have some trouble finding international capital as the nation defaulted on its debts in 2001 and so far has been relying on domestic funding for energy projects. The country also claims a rate of inflation of about 11.1 percent, but could in reality be as high as 26 percent.

However, regulation passed in 2011 allows developers to negotiate premium tariffs with the Argentine government and grid operators, and officials are working out long-term contracts with power plants on a case-by-case basis. The policy changes have attracted companies such as China’s Sky Solar Holdings Co. which has joined Enarsa to build a 20 MW complex in San Juan for $70 million. Spain’s Solaria Energia & Medio Ambiente SA and Argentine developer Aldar SA also have similar ambitions.

Four out of 11 projects have been approved, are funded, and waiting for a tariff to be granted before beginning construction. These include arrays by Sky Solar and Solaria. Many of these undertakings will be split into 5MW solar parks with tariffs of $200 to $400 per MWh. As the third largest economy in South America behind Brazil and Colombia, Argentina has enormous potential to create a thriving renewable energy industry.