Brazil is expected to have a 44% jump in solar installed capacity in 2019, which would lead the country to 3.3 gigawatts (GW) of the source in operation, according to the president of Absolar of Solar Photovoltaic Energy), Rodrigo Sauaia.
The year also should mark a turning point for the Brazilian solar market, according to the entity, with the expansion pulled for the first time by so-called distributed generation – where solar panels on roofs or land generate energy to meet the demand of homes or commercial establishments and industries.
Distributed generation (GD) projects are expected to add 628.5 megawatts (MW) in solar capacity to the country, a 125% increase, while large photovoltaic plants are expected to add 383 MW by the end of the year, a 21% increase.
“It is an important brand for a distributed generation,” said GD, “and it has become a viable option, and there are several lines of financing.” GD is gaining market share in the Brazilian market, “he said. the president of Absolar.
Between 2017 and 2018, a distributed generation had already shown a stronger rhythm, with an increase of 172%, against 86% in large mills, but smaller GD projects added 317 MW in that period, compared to 828 MW in large enterprises, made possible after government energy auctions.
With the rise in energy tariffs in Brazil since 2015 and the reduction in costs of photovoltaic equipment, investments in DG can be recovered over a period of three to seven years, according to Sauaia.
The new dynamic is also a result of Brazil’s recent financial crisis, which reduced demand for electricity and led to the cancellation of a tender for the hiring of renewable plants in 2016.
Then, in 2017 and 2018, the hiring of large solar plants was resumed, but the projects made possible in the last auctions have a contractual obligation to start operations in 2021 and 2022, while distributed generation has continued to grow at an accelerated pace.
“With this, 2019 and 2020 will be years of enormous challenge for the centralized generation … Absolar recommends that the new government structure predictable planning, with hiring continuity, so that the sector can plan to”, Sauaia said, adding that the cancellation of auctions in 2016 generated enormous frustration in investors.
Absolar estimates that the expansion of the source this year should generate total investments of 5.2 billion reais, with about 3 billion reais for distributed generation.
Despite the strong expansion, solar energy still has an incipient presence in the Brazilian electrical matrix, dominated by large hydroelectric dams. The source currently accounts for about 1% of installed capacity in the country, according to data from National Electric Energy Agency (Aneel).
The Brazilian solar market is currently led by Italy’s Enel, which has 703 MW of capacity in solar plants in operation in the country, followed by Engine with 218 MW and Atlas Renewable Energy of British investment company Actis with 174 MW, according to ePowerBay consultancy.
The ranking could soon be led by China’s CGN Energy International, which is in the process of acquiring 450 MW in Enel’s solar power plants, in a deal announced on Wednesday.
The transaction, when completed, should leave Enel in the lead.
Also in the solar sector in Brazil are Omega Geracao and EDF (160.5 MW each), AES North America, AES Tiete (150 MW), Scatec (132 megawatts) and Spanish GPG, of Natural (formerly Gas Natural Fenosa, with 120 MW), according to the ePowerBay ranking.