Solar energy grows, but frustrates those who expected ‘gold rush’

A growth above 50% in just over six months is not exactly a bad result, but it is considered frustrating by those who expected more than doubling the business volume. For distributors and installers of solar energy equipment in Brazil, the expectation was to experience, in 2022, a kind of gold rush for systems.

At the end of the third and penultimate quarters of the year, the picture taking shape is more modest.

In addition to what the sector considers to be the system’s great advantage —the use of a free and abundant source in Brazil, the sun—, there is the calendar: installations registered from January 7, 2023 will start to pay a fee for the use of the network of distribution.

For those who already have a local power generation system and for those who request access by January 6, 2023, this fee, called Tusd B (tariff for the use of distribution systems), or wire B, will be exempt until 2045.

The rise in interest rates and the increase in indebtedness are seen as two factors that contributed to the growth below projections.

The financing of solar energy systems is considered fundamental for accessing the systems, since it has a high initial cost, between R$ 16,600 and R$ 22,000, according to simulations by Portal Solar for a residential system that replaces a monthly expense of R$ 500 with the electricity bill.

With higher interest rates (Selic is at 13.75% per year), credit becomes more expensive. At the same time, the increase in indebtedness raises the risk and reduces the conditions for families to access the lines.

Ronaldo Koloszuk, chairman of the board of directors of Absolar (Associação Brasileira de Energia Solar Fotovoltaica), says that there has been an increase in demand in the last 30 to 60 days, improving expectations for the end of 2022. accelerated and was wrong in this sense”, he says.

From January to August, the average monthly growth, in megawatts, is 57.2% higher than the same period last year. The accumulated power is at 12.7 gigawatts. A year earlier, it was at 7.4 gigawatts, up 71%.

The projection made by the sector in January, however, was to accumulate 25 gigawatts by December, considering all solar generation (centralized and distributed). Only in the distributed one (which is that of the roofs), the expectation is to reach 17 gigawatts.

Rising Selic and elections affect results, say companies

Rodolfo Meyer, from Portal Solar, believes that the election year also affected the investment decision. After a first quarter that indicated acceleration, the war in Ukraine, the anticipation of the electoral campaign and the increase in the Selic rate were relevant brakes.

Therefore, it is betting on an increase in requests in November and December, with the electoral framework already defined. “It looks like it’s heating up. And of course 57% growth isn’t bad.”

At WIN Solar, which distributes solar equipment, the director Camila Nascimento has, in the first half of the year, a higher result than the whole of last year. “Unfortunately, due to the increase in the Selic rate, there was a drop in interest in financing. If this hadn’t happened, there would have been a bigger race.”

While in 2021 the prices of equipment worried the sector, this year there is stability. Sea freight, which exceeded US$ 10,000 (about R$ 54,000) two months ago, has already dropped to the level of US$ 5,000 (about R$ 27,000).

The sector is also exempt from IPI (Tax on Industrialized Products) and, as a result, is exempt from paying ICMS (Tax on the Circulation of Goods and Services). Virtually every part of the photovoltaic system is imported — and almost everything comes from China.

System will still be advantageous after January 6

The beginning of charging for the use of the distribution network was provided for by the legal framework for distributed generation, Law No. 14,300, published in the Federal Official Gazette on January 7, 2022. publication of the law would maintain the wire fee exemption until 2045.

After the system for generating solar energy is purchased, the consumer, usually through the integrator hired for the service, requests access to the grid from the energy distributor. To benefit from the Tusd B exemption, it is necessary to have the protocol of this order registered by the 6th, even if the system is not yet installed.

Rodolfo Meyer, from Portal Solar, and Ronaldo Koloszuk, from Absolar, argue that distributed generation will continue to be advantageous, even with the beginning of charging. Tusd B corresponds to an average percentage of 28% of the conventional tariff.

Starting next year, the collection will be staggered until it reaches the full amount (about 28% of the conventional tariff) in 2029. Koloszuk says the average impact should be 4% each year. With this, the excess energy that goes to the distribution network starts to generate a smaller abatement, as there will be a charge for the wire.

“Does it stop being attractive? No, especially if you compare it to any banking application,” says Koloszuk. For Meyer, the inflation of conventional electricity also plays in favor of the solar generation system.

“In seven years, the charge will be approximately 4.2% per year for those who do not have the benefit [da isenção por mais tempo]. Inflation is above that. If you compare it to an energy inflation of 5% a year, it would still be worth it”, he says. He also argues that every year the systems become more efficient and, therefore, cheaper.

Currently, residential electricity has dropped in price (12.86% decline in the 12 months to August, according to the IPCA), after a combination of conjunctural, seasonal and political factors. The level of reservoirs rose from the end of the first quarter of the year and the water scarcity flag, which charged R$ 14.20 for every 100 kWh (kilowatt-hour) since September last year, was ended.

In June, a law also defined the return of ICMS on PIS/Cofins on the electricity bill, which should result in minor adjustments by the concessionaires.