Electricity generation from the solar source is still in its early stages in Brazil especially in the light of related costs that make the final price of energy high when compared with other sources. Nevertheless, recent studies and incentives to the infrastructure sector have brought about new expectations for expansion that may change this scenario. Market experts envisage that solar energy may be sold at specific solar energy auctions, held by the Ministry of Mines and Energy (MME), in the next few years. This memorandum looks at the most recent alterations and measures taken as incentives for the electric power generation sector to foster the solar source.
According to studies available on the websites published by the National Electric Energy Agency (ANEEL) and the MME, Brazil holds favorable conditions for the development of the entire solar energy production line, including:
A high level of solar radiation, with more than 2,500 hours of sunlight per year and a generating capacity of more than 4 kWh/m2; High-quality quartz reserves – around 95% of the world's total – suitable for production of pure silicon, one of the most important raw materials for solar cells and panels1; Availability of large non-productive areas for the implementation of greenfield projects, especially in the Northeast Region of Brazil, which presents a high level of solar radiation; Regulatory Incentives
The current regulatory framework provides a number of incentives for energy generation from renewable sources, including:
Solar energy generation centers with less than 5MW of installed capacity can benefit from a simplified registration system with ANEEL without the prior approval requirement. Centers with a potential of more than 5MW are subject to an authorization system that has also been greatly simplified; Discounted Distribution System's Usage Tariffs (TUSDs) and the Transmission System Usage Tariffs (TUST) for power plants of up to 30MW which use the solar source, ranging from 50% to 80%; Exemption from the annual payment of 1% of the net operating income on research and development of the electricity sector; Exemption from Value-Added Tax on Sales and Services ("ICMS") for certain equipment and components designed to make use of solar energy; It is worth highlighting that the Federal Government has been adopting R&D measures seeking to develop the solar energy generation market.
Recent changes in...