While most jurisdictions within Latin America and the Caribbean base their core electric generation asset portfolio on fossil fuels, renewable energy technologies are now changing the regional energy landscape. Now, wind, solar, hydro, tidal, and geothermal power plant developers are focusing efforts on transforming Latin America and the Caribbean into more eco-friendly power generators. As a result, local governments have been modifying electric utility regulatory frameworks to accommodate the introduction of renewable energy into regional electric generation and distribution systems.

The renewable energy development activity throughout the region has resulted from a recent two-year “perfect storm” of global energy events. For example, wind power project developers and their tax investors face tax policy uncertainty in the United States. The result is a “choppy” series of boom-and-bust development cycles. Global solar power plant developers, who have been gaining some competitive advantages as a result of declining solar panel and supply-pipeline costs, were dealt a crippling blow in the U.S. after Chinese solar cell manufacturers were levied “anti-dumping” tariffs on products imported into the U.S. Equally, solar power developers have also been affected in the European Union by a threat of high tariffs being imposed on Chinese-manufactured solar panels. Additionally, Spain, which had been a darling of renewable energy developers, retroactively lowered its renewable energy feed-in tariffs and threw the certainty of Europe’s renewable energy industry into a tailspin.

Originally published in Regional Briefing: Renewable Energy In Latin America And The Caribbean in April 2014.