Deadline ends on the 6th to request access to solar energy with exemption until 2045

An important date for the solar energy market is approaching and, in the sector’s assessment, the election period, the World Cup and even a certain habit of leaving everything to the last minute, combined with high bank interest rates and the discussion of new changes in rules may have cooled the search for self-generating solar energy systems.

For distributors, the frustration is not justified, since the high demand for requests for access to the network even overloaded the systems of several concessionaires last week. In 20 of the 40 distributors represented by Abradee (sector association), orders doubled compared to last year.

From 35,900 in November 2021 to 70,000 this year, and the distributors’ projection is that the month of December will also end with a 100% increase in requests. The average number of new connections reached 2,000 consumer units per day.

The race for orders occurs because January 6 is the final date for new solar energy users to guarantee, until 2045, exemption from payment of Tusd B (tariff for the use of distribution systems), or wire B.

At the end of 2022, a bill passed through the Chamber of Deputies and reached the Senate, which, among other changes, sought to extend this period by six months.

The project did not advance under pressure from the distributors, the National Front of Energy Consumers and the Just Energy movement, which estimate an extra cost of R$ 138 billion to consumers (the figure does not only deal with wire B, it includes other changes foreseen in the text under discussion in Congress).

The extension of the deadline was just one of the points under discussion in the bill, which ended up becoming a point of contention among the senators who will support President Luiz Inácio Lula da Silva (PT), who takes office on the 1st.

The discussions also distracted attention from the deadline, which was approaching its end. “Many integrators report that there are doubts about the law and the deadline, there was a noise in communication”, says Lucas Freitas, CEO of the distributor Genyx.

The integrators are the ones who make the installations for the final consumer. “The election issue, then the World Cup, also took away the space for us to communicate”, he says. “And more uncertainty with the deadline, whether the 7th would stay or not.”

Whoever adheres to the system from January 7th will pay for Tusd B progressively until 2029.

The distributors and Aneel consider this exemption a subsidy. What was called “taxing the sun” is, in the assessment of the distributors, the end of a benefit that, when it was created, was intended to stimulate distributed generation (as this energy production from signs on homes and businesses is called ), which ten years ago was expensive and inaccessible.

The market evolved rapidly, especially from 2019 onwards. That year, distributed generation accounted for 2.1 gigawatts. In 2022, it should close with 16.1 gigawatts, according to the projection of Absolar (Brazilian Association of Solar Energy), and should go to 21.6 gigawatts in 2023.

The dispute with the distributors exists because, according to the companies, the use of the distribution network generates a cost for the whole system. In the conventional energy bill, the one paid by ordinary consumers, Tusd B corresponds to around 28% of the conventional tariff.

Microgenerators (homes, small businesses, public buildings, etc.) need to be connected to the distribution network both to use traditional electricity in periods when solar production is not enough, but also because the surplus cannot be stored.

So, today, when a home produces more than it consumes, that energy goes to the distribution network, and the consumer gets a credit with the concessionaire.

According to Aneel, just extending the deadline could generate an additional cost between R$ 13 billion and R$ 25 billion by 2045, an amount that will be shared among all 84 million consumers connected to the network. Added to the other planned changes in the bill, the impact could reach R$125 billion, according to the agency.

Lucas Freitas, from Genyx, argues that the sector’s legal framework was negotiated with the sector to mature the market and pave the way for other businesses and more investments.

The problem, according to him, is that several points provided for in the law were not complied with by Aneel, such as the holding of public hearings and a kind of account meeting of distributed generation, through which the sector hoped to show the impact that the withdrawal of solar energy could cause to the integrated system.

At the company he directs, the increase in negotiations in the second half was 50% compared to the average for the first half, but the result could be better. “There is an acceleration, but these issues of the law leave the client a little confused”, he says.

Financing for solar energy systems is still a complicating factor for the sector. In 2022, household debt rose and credit became more expensive. Systems, whether residential or commercial, don’t come cheap.

Even so, those who operate in specific lines for this type of project registered growth in 2022. BV’s solar panel financing portfolio stood at R$ 4.1 billion in the third quarter of 2022, almost double (96.4% ) than recorded in the same period in 2021.

Bárbara Rubim, vice-president of distributed generation at Absolar, argues that Aneel and the distributors failed to comply with deadlines and commitments set out in the legal framework.

As much as the term of the Tusd B exemption has accelerated investments in the sector, Absolar says that distributors have delayed and created difficulties for consumers to enter with orders. On December 22, the entity asked Aneel to inspect the companies.

According to the association, the websites of four dealerships were offline or experiencing navigation problems in the week leading up to Christmas. The situation, says Absolar, prevented customers from sending the necessary documentation for the access request.

Marcos Madureira, president of Abradee, says that accusing the companies of being unwilling with the requests is untrue. He admits that the systems may have experienced intermittence due to the high volume of network access requests.

In a dealership, of 700 daily orders, on average, the volume, on Christmas Eve reached 2,500. “The ease of sending orders over the internet was created by companies, how can anyone say that they are making access difficult”, says Madureira.

“I can assure you that every completed order that is entered into the system will be considered, even if there was a problem with the order.”

Aneel was approached, but did not respond.