The advance of clean energy in Latin America faced a setback in 2025, as Brazil recorded a significant decline in the installation of new wind and solar power plants, impacting the entire region.
The Brazilian energy landscape, previously known for its rapid renewable expansion, showed a concerning slowdown in 2025. The country saw new wind and solar capacity additions fall by 27% compared to the previous year, dropping from nearly 24 GW to 17.3 GW. This data, compiled by the renowned BloombergNEF (BNEF), signals a brake on the pace of the energy transition, with implications that resonate throughout Latin America.
The drop in Brazil’s expansion is not an isolated event, but a reflection of structural and economic challenges. Grid infrastructure constraints, an increase in power curtailment, and reduced financial attractiveness of projects were the primary factors behind this decline. As a result, Brazil contributed to the first annual contraction in clean energy expansion in Latin America in over a decade.
The Impact on Wind and Solar Generation
Wind power was particularly affected. In 2025, installations totaled only 2 GW, representing less than half the volume observed in 2024. BNEF projections are even more cautious, indicating a drop to 0.4 GW by 2027. This trend is fueled by persistent curtailment, regulatory uncertainties regarding compensation for generators, and growing difficulties in ensuring the economic viability of projects. A more consistent recovery is only expected towards the end of this decade.
In the solar sector, smaller-scale systems, such as distributed generation, showed greater resilience to curtailment. However, the consultancy also expects a slowdown in this niche. The gradual implementation of higher grid usage fees, as established by Law 14.300/2022, is expected to impact the economic attractiveness of distributed solar generation.
Promising Growth in Energy Storage
In contrast to the wind and solar slowdown, battery energy storage is emerging as the technology with the highest growth potential in the Brazilian power sector, according to BNEF. Projections point to annual additions exceeding 1 GW by 2028, a significant leap compared to the 90 MW recorded in 2025.
This expansion is expected to begin in commercial, industrial, and residential units before reaching utility-scale projects. A major milestone in this development will be Brazil’s first auction dedicated to storage technology, scheduled for December 2026, which has the potential to further boost the sector.
Outlook for Latin America
Despite the challenging scenario in Brazil, the consultancy projects an overall recovery in wind, solar, and storage installations in Latin America, with combined additions of 29 GW in 2026. Growth will be driven not only by the expansion of storage but also by market development in countries such as Mexico and Chile. This diversification will reduce regional dependence on Brazil for the advancement of clean energy.
The landscape for the coming years requires close attention to public policy and infrastructure investment, both of which are essential to overcoming current barriers and regaining the promising momentum of the energy transition in the region.
