Solar Power and Prices: Brazil Emerges as a Leader in Photovoltaic Energy

In recent years, Brazil has experienced a remarkable surge in photovoltaic (PV) energy adoption. In 2023 alone, PV uptake in the country witnessed a staggering growth rate of over 1 GW per month, with rooftop PV accounting for 70% of this expansion. The cumulative installed PV capacity in Brazil crossed the 37 GW mark, showcasing the nation's increasing commitment to sustainable energy solutions. With a deployment rate of 60 W per person per year, Brazil's PV sector is advancing rapidly, poised to double its installed capacity every two years.

Several factors have contributed to Brazil's burgeoning PV industry. Favorable net metering legislation, coupled with rising conventional electricity tariffs, has encouraged individuals and businesses to explore alternative energy sources. Furthermore, the consistent and significant downward trend in photovoltaic equipment prices has made PV the second-largest contributor to Brazil's electricity generation mix. While hydroelectricity still dominates the nation's energy market with approximately 110 GW installed capacity, solar PV has made impressive strides, surpassing onshore wind to secure the second position with 37 GW (17% of the country's total capacity). Biomass, primarily derived from sugarcane bagasse and biogas, has further added 17 GW (8%). In combination, these renewable energy sources account for over 85% of Brazil's electricity generation capacity.

Solar PV and wind energy have emerged as the most cost-effective power generation technologies in Brazil. The price development of PV in the regulated electricity market's national energy auctions has witnessed a remarkable transformation. Over the years, PV prices have plummeted from over $100/MWh in 2013 to a mere $32/MWh in 2022, reaching an all-time low of just over $20/MWh in 2019. This drastic decrease in prices has made solar PV an attractive and accessible energy solution for both consumers and businesses alike.

Brazil's energy landscape is poised for further transformation as the nation embraces the electrification of transport, heating, and industry, along with the production of green hydrogen. These advancements are projected to drive the demand for large-scale PV installations in the years to come. With its incredibly well-structured energy market, abundant solar and wind resources, and proximity to export markets in Europe, Brazil has the potential to become a global leader in the production of low-cost hydrogen and ammonia (NH3).

For distributed generation, solar PV stands out as the most cost-competitive technology, offering a levelized cost of electricity (LCOE) that is significantly lower than distribution utility tariffs across the country. The payback period for residential rooftop PV systems typically ranges between three and five years, depending on the solar radiation resource availability and the local distribution utility's retail tariff. Despite the vast potential for PV adoption, only a fraction of Brazil's 93 million consumer units (potential rooftops) have installed rooftop PV systems. Through favorable legislation that enables remote self-consumption, approximately 2.3 million net-metered rooftop PV installations have produced energy credits for 3.6 million consumer units. This inclusive legislation has democratized electricity production and allowed residents in multi-family, multi-story buildings to benefit from PV-generated electricity within their distribution utility concession area.

In 2012, when national legislation and a net-metering scheme allowed PV to be connected to the public utility grid, distributed generation rooftop PV began from humble beginnings. Over the years, rooftop PV capacity has surpassed the installation of large-scale PV power plants, with rooftops now accounting for approximately 70% of the total installed PV capacity in Brazil. As awareness spreads regarding the widening price gap between solar electricity and retail electricity tariffs, more residential consumers are eagerly embracing the rooftop PV option. Additionally, as prices for lithium-ion batteries and electric vehicles continue to decline, the shift away from fossil-fueled vehicles will drive further electricity demand. Rooftop solar PV emerges as the most economical alternative, offering the lowest cost per kilometer traveled.

By capitalizing on its abundant resources, favorable market conditions, and progressive legislation, Brazil is paving the way for a sustainable energy future with solar PV at its forefront.