Can Brazil’s solar market keep growing amid policy shifts and tariff hikes?

Brazil's solar power sector is set to face adjustments amid policy changes and as a global trade war intensifies.

To face these challenges, the local subsidiary of Chinese equipment supplier Trina Solar is betting on vertical integration, improved customer service and innovation.

Trina Solar country manager Daniel Pansarella talked to BNamericas on the sidelines of the Energyear 2025 conference in São Paulo about the company's operations and the changes ahead.

BNamericas: How is Trina Solar positioned to meet the demand of the Brazilian market?

Pansarella: Trina Solar has over 28 years of experience and is among the pioneers in the solar energy sector globally.

Today, we have capacity of around 120GW in module production and 105GW in cell production. Trina has fully integrated its operations, from silicon production to module production.

Having been in the market for so long and recognizing opportunities for synergy while always seeking to provide solutions for customers, Trina Solar also acquired a tracker business unit years ago and established TrinaTracker.

Here in Brazil, we also have a unit, a factory in Salvador, for TrinaTracker. Within this solution-oriented philosophy, Trina Solar also invested in storage and BESS [battery energy storage systems] a few years ago.

Following this philosophy of vertical integration, Trina Solar produces everything in the storage sector, from the cell to the complete solution, including the integration of our equipment with third-party equipment.

BNamericas: How does Trina Solar's local structure work?

Pansarella: I have been with Trina since 2018 and I am the country manager and set up the company’s business unit in Brazil. Today, we have over 60 employees, all on CLT contracts [directly hired].

Trina didn’t come to Brazil as just a company setting up a simple representative operation. We set up a company in Brazil, a subsidiary of the Chinese company. At TrinaTracker, we also established a business unit with a factory in Brazil.

I emphasize this because the market has become accustomed to some companies that only work with a commercial representative in the country, without corporate responsibility.

Trina has a sustainable approach to the solar business, which is why, in the case of modules, we provide a 30-year warranty for our products.

Our focus is always on the longevity of the sector, thinking that we must serve the customer, whether corporate or residential, with solar energy on their roofs.

Today, we are very strong in centralized generation plants. We have around 4GW of Trina modules installed in the Brazilian market.

In the distributed generation market and industrial sectors, we have another 4GW or 5GW installed. We are among the top three brands in the world.

Trina is the global leader in patents for the solar module sector, for example. In fact, today, the cell efficiency record is held by Trina. We have several investments, and I believe one of the big values Trina has is its pioneering spirit in solutions and the search for developing technology.

Our clients have access to our entire local executive team. Whenever we are involved in projects, we discuss the solution with the client, the engineering design, and we are revolutionizing things. We created a project evaluation mechanism called Value Assessment, where we take on the responsibility of contributing to the client and providing a critical view of the project.

We have passed all Inmetro tests and tests from all certification companies. In the last 10 years, only two brands have passed all the tests with 100%. Trina is one of them.

Quality is non-negotiable. It ensures certainty for investors who fund projects using our products, and this works out positively for us.

We have found that, often, it is not even the project developer who choses our product. The investor, the owner of the funds, wants our product to be there to ensure the project’s performance and reliability in delivering what was contracted. In almost all recent analyses, we have exceeded the expectations of what was originally planned by the clients.

This gives us a lot of confidence, putting our name behind the company, and presenting ourselves to the market with our product.

BNamericas: How do you classify the current state of the solar energy market in Brazil?

Pansarella: The challenges continue to build up over time. New challenges emerge regularly.

Our first challenge in the past was growing in the market, increasing production volume, and delivery volume year after year.

We observe the sector’s growth and notice the consistent volume of growth, but at the same time, we see that the Brazilian government has implemented policies that change the rules. This, in some way, creates legal uncertainty and presents challenges for investors and project developers.

I believe we are currently in a phase where these changes are causing large groups of investors to study projects more deeply.

This is because investors are also realizing that energy prices are low, as we are in a year with a lot of rain, which means hydropower is providing more of the market’s energy at a lower cost.

At the same time, we are experiencing regulatory issues regarding access opinions and connections, which is causing significant difficulties.

[Editor's note: An access opinion details the conditions for accessing the grid and is issued by the distributor upon request from a consumer who intends to generate solar energy.]

Not to mention the [weakening of the real against the dollar] and interest rates, which affect the perception of financiers.

But even with all these challenges, we are finding groups that are still seeing good opportunities and strong projects. Although this year, I think there will be a decrease in volume compared to 2024.

I also think that not every year needs to be so accelerated in terms of projects. 2024 was an atypical year given the significant growth, but it is challenging to grow 30%, 40% or 50% every year.

Now, we are entering a phase with a bit of stability regarding growth, but with consistency.

BNamericas: What are the prospects for expansion amidst the expectation of market adjustments?

Pansarella: Storage will bring something new, not only for new projects but also for retrofitting built projects, mainly because of the curtailment related to connection problems in the Brazilian energy sector.

This is a crucial element, as some projects reached 50% curtailment last year, meaning they were unable to inject energy into the grid due to connection issues.

It is a massive challenge for investors to keep projects alive. What remains for them is to maintain the investment and possibly expand the project, eventually with batteries, to generate more certainty.

But battery regulation is still lacking. Our challenge for 2025 will be the introduction of storage and the regulation for this sector, to create more legal certainty for investors.

BNamericas: What do you expect from the capacity reserve auction in June?

Pansarella: I think it will be similar to what happened in the solar sector in 2012 and 2013, when major global players came to Brazil and used wind connections to implement solar, even in a dispute with [regulator] Aneel and [grid operator] ONS, changing connections that were originally planned for wind to solar.

I believe that storage will follow the same premise, eventually entering built projects and new projects through the capacity auction, which I think is an opportunity for large players to establish themselves here.

Trina will have a technical team here to meet the demand. Trina has already commercialized over 2GW of storage in Chile, so we have a technical team to support all the growth the sector needs and to help with the growth that Brazil will require in 2025.

BNamericas: Will you participate in the capacity auction directly?

Pansarella: Trina does not enter directly. It is an equipment supplier and a strategic solutions partner. Trina will participate in the auctions through partners, investors and project developers who are working in this sector.

We are supporting pre-auction activities by helping design solutions with some investment and development groups, but it is not our role to enter the auction directly. Instead, we support our partners.

BNamericas: How might the emerging trade war affect the sector and the business environment?

Pansarella: Tariffs in our sector emerged earlier. We had an increase to 25%.

[Editor’s note: In November, the Brazilian government increased the import tax on photovoltaic modules from 9.6%.]

The government canceled all ex-tariff benefits [that reduce import duties] in the market.

With this measure, the government believes that Brazil will develop a local photovoltaic module production industry to serve the entire solar sector. This is surprising because the two local manufacturers halted their operations.

The ex-tariff benefits started to disappear over six months, almost a year ago, but even after that, I don't see any movement from the manufacturers to consider producing anything in Brazil.

I believe that this government decision was more focused on increasing revenue. The 25% import tax ended up being disproportionate, especially considering that the government claims to have goals related to sustainability and the development of clean energy.

Given this scenario, I think that in 2025 we will face – in fact, we are already facing – a complete halt in the sector, which is a job creator, with layoffs in many companies because without projects, everything has frozen.

We were having an open, frank and transparent conversation with the government about this tax issue. We are not defending our own interests. The Brazilian people are being harmed and will have to pay a higher price. And those participants who were planning significant investments in plants are now having to lay off people.