Spotlight: Brazil’s booming solar power market

The continued growth of solar power in Brazil is generating business opportunities for a myriad of companies, from small and medium-sized domestic firms to big multinational groups.     

Domestic solar power association Absolar said on Wednesday that the country had surpassed 14GW in PV solar power, adding large and distributed generation systems. 

As a result, solar has now exceeded the 14GW installed capacity of the country’s largest power plant, Itaipu Binacional (considering both the Brazilian and the Paraguayan capacity).   

Absolar forecasts rapid growth in solar systems in operation in Brazil this year, with 52bn reais (US$10bn) outlined in investments and another 11.9GW expected to come online. 

The main driver is the distributed generation market, given the increase in electricity rates and the entry into force of the regulatory framework for the segment.

"It is, therefore, the best time to invest in solar energy, precisely because of the new increase already foreseen in local electricity bills and the transition period outlined in the law, which guarantees the maintenance of the current rules until 2045 for consumers who install a solar system on their roof by January 2023," said Absolar chairman Ronaldo Koloszuk in a statement.

Brazil has 4.7GW of installed capacity in large solar plants, equivalent to 2.4% of the country's electricity generation, while the distributed generation segment now accounts for 9.3GW of installed solar capacity.

In January, the generation of PV solar energy increased 60.9%, totaling 1,134MWa (average megawatts), according to a recent survey of the local electric power commercialization chamber CCEE. 

The state with the largest contribution to this amount was Bahia, with 233MWa, followed by Minas Gerais (163MWa), Piauí (90MWa), São Paulo (74MWa) and Ceará (49MWa). 

COMPANIES CASHING IN ON SOLAR BOOM

A clean fintech that offers financial solutions through energy bills, Insole posted 180% growth in sales in 2021 and expects to maintain the growth curve of financing for distributed generation this year. 

The company will invest in technology to expand its lines of financing, launch new credit products, and accelerate the process of massification of solar energy in Brazil by spreading the digital platform and its more than 300 franchisees distributed throughout the country.

Brazil is currently responsible for 9% of Trina Solar’s sales of PV solar modules around the world, absorbing equipment that was capable of generating 1,500MWp (peak MW) of energy in 2021. 

“When we arrived in the country, the market was relatively small and now it's one of the biggest ones in the world," Álvaro García-Maltrás, vice president of Trina Solar in the Caribbean and Latin America, said in a statement. 

Last year, the Brazilian power generation start-up Evolua Energia concluded its first fundraising of 123mn reais (US$22mn) with a green-labelled real estate receivables certificate (CRI).  

The funds will be used by the company for the construction of new photovoltaic plants in the country until May 2022, with a focus on the shared distributed generation (DG) market.

The solar plant builder Alexandria reached revenues of 350mn reais in 2021, growth of some 1,500% compared with 2020. 

So far the company has delivered or is building more than 100 plants throughout Brazil, totalling over 150MW of generation capacity. 

Italy’s Enel Green Power is working on the expansion of Brazil’s largest solar plant,  São Gonçalo, and of the country’s first hybrid generation park (combining solar and wind). 

Even traditional oil and gas companies are betting on the domestic solar power business. 

Last month, Shell closed a deal with local steelmaker Gerdau to form a joint venture focused on the development of a solar park in Minas Gerais state. 

With an installed capacity of approximately 260MWp, the project will supply 50% of the power generated to Gerdau's steel production units in Brazil, while the other half will be traded on the free market through the Anglo-Dutch oil major's energy trader Shell Energy Brasil.

The partnership could enable the development of about a third of the total capacity of the solar farm. Shell will continue to seek other long-term customers – such as self-producers – to address the remaining volume of the complex.

Another highlight is that of Norway's Equinor, whose first global solar project, Apodi, was installed in Brazil, where it has extensive experience as an oil and gas producer.  

“We want to continue developing opportunities for more and more sustainable energy sources. We have memoranda of understanding signed with partners to further develop solar,” local CEO Veronica Coelho said in a statement.