Why the appeal of Brazil’s solar market is expected to endure

Brazil’s solar power market is expected to maintain its appeal in the coming years, according to executives in the sector. 

The international energy agency (IEA) reports that Brazil added the fourth highest amount of solar generation capacity in the world in 2022, with 9.9GW of power. 

Local PV solar association Absolar recently announced that Brazil surpassed the historic figure of 10GW of operating power in large (centralized) solar plants in August. 

The forecast is that the country will surpass 35GW by year-end, considering distributed generation (DG) systems, which are likely to reach 25-26GW by end-December. 

The rapid growth, which is also being backed by federal initiatives, is attracting myriad players both from Brazil and abroad. 

With 17,000 customers and distribution operations in the US, Canada and Mexico, BayWa r.e. has signed an agreement to acquire Ribeiro Solar, a solar energy distributor operating exclusively in Brazil. 

The aim is to offer products and training to installers, taking advantage of Ribeiro Solar's distribution centers in Paraná, Rio Grande do Sul and Pernambuco states. 

Daniel Marino, director of solar trade in the Americas at BayWa r.e. said that Brazil's residential, commercial and agricultural solar energy segments are evolving rapidly due to increased accessibility, affordability and support policies. 

"We expect further growth in this market to be driven by the dual benefits of reducing carbon pollution while boosting the country's energy independence," he told BNamericas.

The BayWa r.e. executive – whose shareholders are BayWa and Energy Infrastructure Partners – emphasized that the entry into Brazil is also aimed at boosting the growth of clean energy in the Americas.

Ramon Nuche, director for Latin America at German solar module manufacturer AESolar, believes Brazil’s solar market will remain attractive for two basic reasons. 

“The first is that the cost of energy continues to rise, above inflation, and our potential in DG is still enormous. The second reason is that we're living through a technological transition that has brought the prices of photovoltaic modules to very attractive levels,” he told BNamericas. 

Despite the new DG regulatory framework, which taxed part of the credit for the energy generated, the more attractive prices generate a shorter payback for the end customer, Nuche emphasized. 

He highlighted that AESolar forecasts 80% growth in 2023 compared with last year. 

Tulio Fonseca, CEO of solar power franchisor Energy Brasil, said that the country is a market that is maturing in terms of structure and players, reflecting concern about the ESG agenda.  

"Despite the relatively difficult first half of the year in the economy, we expect a positive growth curve for the company over the year, due to the improvement in credit conditions and the reduction in the price of equipment, which has reached a low in the country," he told BNamericas. 

Energy Brasil has been investing in software to improve the service of its network of franchisees and in training its staff and other professionals who serve its customers, such as installers and electricians. 

Meanwhile, small, medium-sized and large energy companies are surfing the wave of Brazil’s solar market boom.  

Among the examples are Usinas Brasil Solar, which recently started operating two plants in Rio de Janeiro state, Eneva, which began generating electricity from the Futura 1 complex in Bahia state earlier this year, and Equinor, the Norwegian oil and gas producer that invested in the Apodi project in Ceará state in partnership with Scatec. 

Traditional groups from the electric power sector with growth perspectives in the local solar market include AES, Canadian Solar, Cubico, EDF Renewables, EDP, Elera, Eletrobras, Enel, Eren, GDSUN, GreenYellow, Origo Energia, Pan American, Solatio, Statkraft and Voltalia.