How subscription solar energy works, which makes electricity bills cheaper

With the electricity bill soaring and the tariff flag triggered for most of 2021 due to the severe drought that hit the country last year, businessman Fredy Rodrigues, owner of two bakeries in Santos, on the coast of São Paulo, He was looking for a way to reduce his energy expenditure.

“We made the budget for installing solar panels on the roof. But our property is not owned and the investment would be very high”, recalls Rodrigues.

Faced with the cost of bread and rent pressured by inflation and falling revenues, due to universities and commercial buildings closed amid the pandemic, he then got to know solar energy by subscription.

With the service, he has saved an average of 12% per month on the electricity bill.

“A bakery electricity bill ranges from R$12,000 to R$20,000 per month. In the summer, we have to turn on all the air conditioners in the store. In the winter, the oven works harder, so we use a lot of electricity. “, explains the businessman.

“With savings of 10% to 15%, there are R$ 2 thousand less per month of expenses. In the year, we are talking about R$ 48 thousand savings and using clean energy. I have already spoken with the company’s marketing area to we do this advertising, because we are in the middle of three universities and the younger kids have a different look at it.”

Fredy’s bakeries are part of a small group that is growing year by year.

In March of this year, Brazil had 5,635 consumer units served by shared solar generation, a modality that became possible in Brazil in 2015.

In that first year, there were 45 consumers using the model. Two years later, 376. The number has risen to over 1,500 consumers in 2019 and topped 5,000 in 2021, with 1,610 generating units currently producing power to serve this growing market.

shared solar generation

“Shared generation was created in 2015, when Aneel (National Electric Energy Agency) realized that solar generation in Brazil was not growing at the pace it could have, given the potential we have”, says Guilherme Susteras, coordinator of the group of distributed generation work from Absolar, an association that represents the sector.

“One of the bottlenecks identified at the time was that 75% of consumer units did not have the technical capacity to receive photovoltaic generation systems. We are talking about people who live in apartments, the structure of Brazilian roofs and the fact that most people and small businesses occupy rental properties.”

The international experience served as a model for the Brazilian system of shared generation.

Beginning in Germany, and later spreading to Europe and the United States, the model of “solar communities” was based on cooperatives or consumer consortia, which together made it possible to install small plants, sharing the energy produced, even if distant from the location. of consumption.

Some companies saw in the regulatory change, which created the modality of remote generation in Brazil, an opportunity to offer a new service in the country: solar energy by subscription.

Electric bill ‘Netflix’

This was the case, for example, of Sun Mobi, a company created in 2016 to operate in the segment, which currently serves 300 customers in 27 municipalities in the State of São Paulo.

“The possibility arose of placing the solar farm in an area. It generates energy for the distributor and this energy is sold in the form of credits, which can be deducted from any electricity bill, as long as it is in the same concession area as the distributor”, explains Alexandre Bueno, one of the company’s partners.

For example, a residence with an average monthly consumption of 200 kilowatt-hours per month (kWh/month) in the concession area of ​​Cemig, a distributor operating in Minas Gerais, buys credits from a subscription solar energy company that also operates in the area. from Cemig.

The contracted company “injects” the generated solar energy into the grid and the credits are deducted from the consumer’s account. In the model, the consumer is free from the tariff flag — a benefit established by Aneel to encourage the production of clean energy close to consumption locations.

And, in general, it negotiates the energy at an advantageous value, in relation to that purchased from the distributor, also counting on predictable readjustments, according to the agreed contract.

“It’s as if the customer had a ‘virtual panel’, instead of placing the panel in his building, he enjoys the generation of the plant remotely and the distributor makes the compensation”, says Bueno.

“That’s why we thought of a way to adapt this model to the reality of the consumer, who today subscribes to Netflix, Disney, HBO, in a very flexible way. pays nothing to get in. So in this model the customer does not invest anything and starts to enjoy the generation of the plant practically instantly, in a maximum of 60 days”, he says.

“We’re bringing the streaming model to the energy market.”

According to Absolar, about 20 companies currently operate in this market in Brazil, with Minas Gerais being the state with the strongest presence of distributed generation, which includes other business models, in addition to subscription.

In addition to providing access to solar energy for those who live on rent, in apartments or properties with inadequate roofs, the subscription service also exempts consumers from the costs of investing and maintaining the panels.

The industry association estimates that the typical investment is around R$15,000 to R$20,000 to supply the electricity consumption of a family of four with solar energy, which generally takes between four and six years to pay off. , with the savings generated in the electricity bill.

A market that is in its infancy, but with great potential

The generation of solar energy is quite recent in Brazil.

There were few projects in the country until 2014, when the federal government held the first energy auction with the participation of photovoltaic solar sources.

In the auctions, the plants sell energy contracts to distributors, such as Enel, Cemig, Light, and this sale makes the construction of projects possible. It is the so-called centralized generation model, whose first plants started operating in 2017.

Between 2015 and 2016, Aneel created the distributed generation model, in which production is carried out not in large plants, but in small generating units, with a capacity of up to 5 MW (megawatts), in the consumer unit itself or in a nearby location. .

Since 2020, distributed generation has come to represent the largest share of photovoltaic solar generation in Brazil, representing 67% of Brazilian installed capacity in March 2022.

Last year, Brazil was the fourth country that grew the most in terms of photovoltaic solar energy production capacity, with 5.7 GW (gigawatts) added, behind only China, the USA and India, according to a survey by the International Renewable Energy Agency ( Irena).

The country is currently the 13th in the world in terms of accumulated installed capacity for this energy, with the prospect of entering the Top 10 in the coming years.

Despite this growth, solar still represented only 1.7% of the Brazilian electricity matrix in 2020, according to the 2021 National Energy Balance of the EPE (Empresa de Pesquisa Energética).

For Susteras, from Absolar, one of the factors that explains the still small participation of solar sources in the Brazilian electrical matrix is ​​the fact that Brazil entered the segment later than other countries.

The country also spent years without a regulatory framework for the sector, says the representative, which in his opinion was resolved this year with the approval of Law 14,300/22, which established the legal framework for microgeneration and distributed minigeneration.

“With legal certainty, the capital market should feel more comfortable to finance projects”, says the coordinator.

“Like all new technology, there is a natural adoption curve over time. And as the cost goes down and the energy tariff goes up, the technology becomes more and more attractive.”

Historically, one of the main bottlenecks for the development of solar generation in Brazil was the fact that most of the equipment used is imported and therefore has a cost in dollars.

Susteras notes, however, that as the market gains scale, the cost of technology has been falling by between 10% and 15% a year. In addition, the local market has become more specialized, expanding the offer of services.

Thus, the specialist sees great potential for the advancement of distributed solar generation in Brazil and also for subscription services aimed at residential consumers and small businesses.

“This market has barely begun, the truth is. If we consider that 75% of people who want to have solar energy do not have physical restrictions [de seus imóveis]we have an idea of ​​how much this market can grow, because this is a market that has no restrictions — other than the geographic one [de o prestador de serviço estar na mesma área da distribuidora que atende o consumidor]”, says Susteras.

“Solar energy can be very democratic in Brazil. There are a lot of people who haven’t even heard of it, who don’t even know they could have it, but who will discover it little by little. It’s a matter of time.”