Distributed solar energy: historic opportunity or risk of setback for Brazil?

Brazil has unique conditions to become a global leader in distributed solar generation
Distributed solar energy: a historic opportunity or a risk of setback for Brazil
Photo: Canva

In recent years, the distributed solar generation sector in Brazil has gone from being a niche to a leading player in the energy transition, reflecting regulatory advances, greater environmental awareness and easier access to technology. Contrary to a pessimistic view that points to technical and bureaucratic challenges as insurmountable obstacles, it is possible to design a path of sustainable growth that preserves the environmental, social and economic gains already achieved.

Law 14.300/2022 represents an important milestone. Although it introduces tiered charging for the use of the electricity grid, it also offers a fair and predictable transition until 2045. However, it is essential to highlight that ANEEL is more than two years late in complying with Article 29 of the aforementioned law, which determines that the regulatory agency present technical studies that quantify the benefits of distributed generation for the electricity grid.

The lack of such delivery hinders the qualified debate on the impacts and limits the formulation of more effective policies for the sector. Even so, the transition model provided for in the law allows consumers and integrators to adapt progressively, protecting investments already made and encouraging new projects based on clear rules.

Furthermore, recent measures by the ANEEL to simplify the connection process in smaller systems are positive steps. With additional technical adjustments and greater standardization among distributors, it would be possible to accelerate the integration of systems safely, without burdening the sector or compromising the stability of the network.

Constructive criticism from sector entities, such as ABSOLAR (Brazilian Association of Photovoltaic Solar Energy), MSL (Free Solar Movement), ABGD (Brazilian Association of Distributed Generation) and INEL (National Institute of Clean Energy), is valuable for improving these mechanisms.

Brazil has unique conditions to become a global leader in distributed solar generation. Favorable solar irradiation, competitive costs per kWp and high electricity tariffs mean that the average payback period for residential systems is between 4 and 5 years, well below the North American average. With affordable financing and for projects in low-income communities, such as the Clean Energy program, the sector can further democratize access to clean energy.

To ensure balanced growth, it is recommended that public authorities and regulators:

  1. Maintain regulatory stability, with periodic reviews based on real and predictable impact data;
  2. Improve licensing and connection processes, with digitalization, deadline targets and greater transparency on the part of distributors;
  3. Promote mandatory certifications of facilities and professionals, with incentives for the training of qualified workers;
  4. Encourage research and development in smart grids and storage, which expand the grid's capacity to absorb distributed solar generation;
  5. Encourage accessible green credit lines for end consumers, condominiums and small businesses.

Such measures can ensure that distributed solar generation grows steadily, generating jobs, attracting investment and contributing to national energy security. The focus should be on consolidating a safe, transparent and stable environment that rewards efficiency and innovation.

A quick and effective way to prepare the Brazilian electricity sector for the consolidation of distributed generation would be to direct part of the available funds from the regulated R&D (Research and Development) and Energy Efficiency programs of the ANEEL for projects aimed at including energy storage.

These projects should cover both behind-the-meter solutions (in consumer facilities) and those coupled to the distribution infrastructure, creating the basis for intermittent sources such as solar and wind to become dispatchable sources. Such a transformation would enable significant gains in energy quality, security of supply and grid stability, bringing Brazil into line with international best practices.

It is also important to demystify imprecise comparisons frequently made by entities such as ABRADEE and even by the company itself. ANEEL, who claim that measures such as charging for Fio B, limitation by flow inversion (or as affectionately named by the sector, “Flow Invention”) and restrictions on access to the network already occur in mature markets such as the United States.

hahahaYes, they do — but in a radically different context. Let's take California as an example: even with more than 1,8 million installed photovoltaic systems and more than 12% solar penetration in the state's energy matrix, recent changes in tariff compensation (NEM 3.0) have already resulted in the dismissal of more than 17 workers in the solar sector in 2023 alone, according to data from the CALSSA (California Solar & Storage Association).

Companies have closed or resized their operations, which shows that, even in mature and technologically advanced environments, the adoption of these restrictive measures — such as Wire B collection, flow reversal limitation and technical barriers to connection — if poorly calibrated, can have significant side effects. Importing these measures to Brazil — which is still in the early stages of penetration of distributed solar generation — without due care is a formula for retracting investments, generating mass unemployment, limiting access to clean generation and slowing down the advancement of a sector that has the potential for social inclusion, sustainability and promoting regional development in a significant way throughout the continental territory of Brazil.

Adopting isonomic restrictive measures, disregarding the reality of each region, is like killing a child in the cradle, before he or she even learns to speak.

The opinions and information expressed are the sole responsibility of the author and do not necessarily represent the official position of the author. Canal Solar.

Photo by Eduardo Nicol
Eduardo Nicol
General Director of Operations at Renew Energia. Hands-on executive with more than 30 years of experience in managing people and complex projects in the information technology, telecommunications, transport, food and renewable energy industries. Training in information technology, specialization in project management from George Washington University/ESI, PMP certification from PMI/USA and MBA in Business Management from FGV.

An answer

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