'Nowhere else in the world do you see such a fast return on investment'

Brazil's Solfácil recently raised 1bn reais (US$172mn) to finance solar energy projects in the country.  

With the operation, the company has surpassed 5bn reais raised through the capital markets, maintaining its position as Brazil's largest green bond issuer, according to data from the Inter-American Development Bank (IDB).  

Solfácil offers financing, solar distribution equipment, solar energy monitoring systems, insurance, and a benefits program for integrators.  

It is backed by major investment funds such as QED Investors, SoftBank, Valor and the IFC, among others, which have invested over 800mn reais in three funding rounds.

Guillaume Tiret, CFO and co-founder of Solfácil, spoke with BNamericas about the company's plans for 2025.  

BNamericas: Does Solfácil have a projection of how much it will seek to raise in 2025?  

Tiret: We already have projections for new fundraising this year to enable the financing of solar systems. In the second half of the year, we plan to raise up to 750mn reais through CRI [real estate receivables certificates]. We're constantly accessing the debt market to secure financing for distributed generation.  

BNamericas: Is the financing exclusively focused on distributed generation, or does the company also fund centralized projects

Tiret: Our focus is exclusively on distributed generation, primarily in the residential market, which ranges from 4-8kW, and low-power commercial projects of up to 12kW. However, we also support larger projects with inverters of up to 250kW.  

BNamericas: Do you also consider financing energy storage projects?  

Tiret: Yes. We already have solutions for this market and are heavily investing in battery systems for our distribution segment. Interest in batteries has been growing due to law 14,300 [the regulatory framework for distributed generation], power outages, reverse power flow and the declining cost of raw materials.  

[Editor's note: Reverse power flow occurs when the amount of energy generated exceeds the demand of connected consumers.] 

BNamericas: Doesn't the high Selic policy rate and issues like curtailment and reverse power flow affect demand for solar financing? Is there concern about a decline in demand?  

Tiret: These challenges may cause a slight temporary drop in demand, but credit for photovoltaic systems is more accessible today than it was in early 2022.  

Additionally, the price of solar panels has fallen significantly over the past two years, keeping solar energy investment attractive in Brazil. The payback period for end consumers remains very appealing, sometimes less than three years. Nowhere else in the world do you see such a fast return on investment.  

BNamericas: Could this decline also be driven by the gradual taxation of distributed generation projects, as outlined in the sector's regulatory framework?  

Tiret: Yes, it's possible that taxation of distributed generation projects could impact the number of projects. However, solar energy remains a highly advantageous investment in Brazil.