The energy storage market in Latin America is projected to grow at a compound annual growth rate (CAGR) of 8%, reaching a total capacity of 23 gigawatts (GW) by 2034, according to Wood Mackenzie’s Latin America Energy Storage Outlook 2025.
Chile is leading the region’s energy storage installations, followed by Mexico and the Dominican Republic. “Chile’s regulatory policies have positioned the country as the most advanced in energy storage, representing nearly half of the region’s total capacity by 2034,” said Pamela Morales, Research Analyst at Wood Mackenzie. “Mexico has great potential to continue advancing in this market, but it’s facing some regulatory barriers. For its part, the Dominican Republic has shown rapid growth.”
The report indicates that utility-scale projects will dominate the market throughout the forecast period, with tailored approaches depending on regional requirements. Standalone utility-scale projects are enhancing grid stability across Central America and the Caribbean, while high solar energy penetration is encouraging solar-paired projects in Mexico and South America. The commercial and industrial (C&I) sector is expected to see development opportunities in select countries by the mid-2030s.
Key Drivers of Growth
Renewable energy targets and rising curtailment levels are driving momentum for energy storage deployment across the region. Regional tender adoption has proven effective in incentivizing storage, while grid constraints caused by higher renewable penetration are increasing the need for battery energy storage systems (BESS). Updated energy plans across multiple countries now incorporate long-term storage targets as a foundational step for further growth.
Challenges Remain
Despite the positive outlook, regulatory gaps could hinder progress. “BESS deployment stalls without comprehensive storage regulatory frameworks, operating models, and remuneration mechanisms for each market segment,” Morales noted. Upfront costs also remain a barrier in some markets, though competition and market participation are expected to reduce costs over time. Infrastructure limitations, while offering opportunities, also pose challenges for deployment.
“The LatAm market still needs to find a balance between policies and incentives to keep growing. Long-term success depends on developing comprehensive regulatory frameworks and reducing deployment barriers across all market segments,” Morales added.
