Developing a Distributed Solar Energy Sector in Chile

Team Chile worked with the Universidad de Chile and Fundación Chile in Santiago. Our goal was to recommend policy and financing tools to spur the development of distributed, or behind-the-meter, solar energy generation in Chile.

This past Thursday, Team Chile sat in the audience of a large auditorium watching the Chilean presidential candidates debate the future of energy in their country. Broadcast live on CNN Chile and sponsored in part by one of our clients, Fundación Chile, the fierce debate stressed the critical nature of Chile’s current energy dilemma. Chile needs more energy to fuel its continued economic growth, but the high smog levels in Santiago, foreign dependence on fossil fuels, and rising price of energy are leading Chileans to look for clean, sustainable energy sources within the country.

Our team with Marcos Kulka, the CEO of Fundacion Chile and a Haas alum, at the presidential debate on energy.

Our team with Marcos Kulka, the CEO of Fundacion Chile and a Haas alum, at the presidential debate on energy.

Luckily, Chile boasts some of the best solar radiation in the world. Major investment in large-scale solar generation in northern Chile has begun through both international solar developers as well a local start-ups such as Solar Chile, which was co-founded by Haas alum Cristian Sjogren.

Dinner with Haas alum Cristian Sjogren and his co-founder Koichi Arimitsu, who co-founded Solar Chile.

Dinner with Haas alum Cristian Sjogren and his co-founder Koichi Arimitsu, who co-founded Solar Chile.

Despite the growing solar industry, distributed solar on rooftops or in small community installations is relatively unexplored in Chile. Our team examined the existing markets for distributed solar in California and Germany, and then spent three weeks in Chile testing our hypotheses around how those models for public policy and financing tools might be applied in Chile.

In our first two weeks in Chile, we interviewed a broad web of stakeholders, including government ministries, environmentalists, educators, solar customers, bankers, retailers, entrepreneurs, and policy experts in Santiago. We traveled outside the capital city to interview potential commercial customers from the wine industry, and visited the port city of Valparaiso to listen to consumer opinions.

We visited the port town of Valparaiso to talk with potential solar customers.

We visited the port town of Valparaiso to talk with potential solar customers.

We visited a vineyard in the Maipo Valley to talk about their small solar-thermal installation.

We visited a vineyard in the Maipo Valley to talk about the winery’s solar-thermal installation.

Not only did we hear about policy and financing needs, but we also heard about the need for education and capacity building to foster distributed solar in Chile. As a result, we developed recommendations for a multi-pronged approach to educating consumers, financiers, government, and solar installers. We explored what it would mean to establish policy, financing, and education to spur a more democratic, distributed energy future for Chile using solar energy.

Team Chile worked closely with the Energy and Climate Change team at Fundación Chile as we developed our recommendations and tailored our ideas to the Chilean context. Fundación Chile’s office overlooks the city from high in the hills, and on a clear morning you can see the nearby Andes mountains covered with a fresh coat of snow. The organization is part think-tank and policy organization, and part incubator for new industries in Chile. (It is well known for fostering the salmon industry in Chile, for example.) The dual nature of Fundación Chile’s work pushed our team to think about both the macro-scale policy structures needed to foster the distributed solar market, as well as community engagement and viable business models for service providers working from the ground up.

The offices of Fundacion Chile overlooked the city and out to the Andes mountains.

The offices of Fundacion Chile overlooked the city and out to the Andes mountains.

In our final week, Team Chile presented our recommendations spanning policy, financing, education, and business models to increase the rate of solar adoption and establish a new, competitive sector for the Chilean economy. For example, new financing models such as solar leasing can be applied in Chile to reduce the upfront costs of solar systems and bundle customers to reach scale for effective financing opportunities.

Solar panels provide lighting at the local bus stop.

Solar panels provide lighting at the local bus stop.

Chile has already taken many positive steps toward fostering the distributed solar market with early policies that establish a vision for renewable energy development. To help Chile capture more of the value from its distributed solar industry and support rapid market expansion, our findings support even stronger, large-scale initiatives.

In the coming years, Fundación Chile and Universidad de Chile together will lead policy and public-sector initiatives to unlock demand and capital in Chile for distributed solar. In addition, Fundación Chile will undoubtedly incubate a solar provider for the Chilean market. As Chile turns to national elections in the fall, its foremost experts on policy and energy at Fundacion Chile and Universidad de Chile will have the opportunity to push for new ideas. We hope that our recommendations can help inform new developments in the nascent distributed solar sector, making Chile a regional leader in solar energy.

Our last day at the Fundacion Chile offices in Santiago

Our last day at the Fundacion Chile offices in Santiago

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