Latin America’s Energy Storage Market Forecast to Reach 23 GW by 2034

The energy transition in Latin America is accelerating, with energy storage growth expected to play a central role in strengthening grid reliability and supporting renewable integration. A recent market analysis projects that the region’s battery storage systems and other technologies will expand at a compound annual growth rate (CAGR) of about 8%, reaching 23 gigawatts (GW) of installed capacity by 2034.

Leading Markets in the Region

Chile is forecast to lead the way in installed storage capacity, thanks to advanced regulatory policies and strong commitments to renewable energy in Latin America. Mexico and the Dominican Republic are also set to play important roles, with Mexico benefiting from its large solar sector—despite regulatory challenges—and the Dominican Republic seeing rapid momentum in storage deployment.

Large-Scale and Hybrid Projects Driving Adoption

Utility-scale and industrial applications remain the dominant market for battery storage systems in Latin America. Standalone projects have been particularly prominent in Central America and the Caribbean. Meanwhile, countries with high levels of solar generation are increasingly adopting hybrid projects that integrate solar PV with storage. Looking toward the mid-2030s, the commercial and industrial (C&I) segment is expected to capture a larger share of installations.

Factors Driving Energy Storage Growth

Several drivers are fueling the expansion of renewable energy in Latin America and the associated rise in storage demand:

• National renewable energy targets that require balancing solutions
• Grid constraints in systems with high renewable penetration
• Competitive auctions that increasingly include storage components

Battery storage systems are viewed as essential for stabilizing electricity networks while enabling greater shares of variable renewable energy. Many governments have already incorporated long-term storage targets into their national energy strategies.

Barriers to Overcome

Despite the promising outlook, challenges remain. The absence of clear regulatory frameworks and well-defined remuneration models continues to limit energy storage growth in some markets. High upfront investment costs and infrastructure limitations also pose hurdles, though broader participation from both public and private stakeholders is expected to reduce these barriers over time.

Current Installed Capacity

At present, Latin America and the Caribbean host around 2.5 GW of installed energy storage capacity, with about 1.5 GW coming from battery storage systems and the rest from pumped hydro. This baseline highlights the significant room for expansion over the next decade.

Outlook for the Next Decade

By 2034, the region’s battery storage systems are expected to play a crucial role in ensuring reliability, flexibility, and resilience as renewable energy in Latin America continues to expand. With falling technology costs, supportive policies, and a growing recognition of the importance of storage, the market is well positioned for sustained growth.