The Brazilian Solar Energy Association (ABSolar) has significantly reduced its solar capacity forecast for Brazil in 2024, citing impending regulatory changes in distributed generation and a slowing economy. Despite this near-term caution, the country’s solar sector continues its remarkable long-term expansion, installing 4.1 GW in the first half of the year alone and pushing the total Brazil solar capacity past the 55 GW milestone.
Regulatory Changes Impact the Brazil solar capacity drop
ABSolar has revised its 2024 forecast for new solar capacity downwards by up to 50%, a direct response to policy uncertainty and economic headwinds. While Brazil’s solar industry celebrated a historic first half of the year, this momentum is now under threat.
At the heart of the issue are upcoming changes scheduled for 2025, outlined in Normative Resolution No. 1,067 by the Ministry of Mines and Energy (MME) and the National Electric Energy Agency (ANEEL). According to Rodrigo Sauaia, the CEO of ABSolar, these new regulations will fundamentally alter the market. The current model, which relies on individual connections and net metering for smaller-scale systems, faces a critical test under the new Brazil distributed generation policy.
The government’s proposal aims to modernize the sector by introducing a capacity auction system. This is intended to prevent market saturation and manage grid stability, particularly in states with high solar penetration like Minas Gerais and Mato Grosso do Sul. This move comes as Brazil grapples with the paradox of its own success, facing potential renewable curtailment due to grid limitations.
New Auction System Raises Concerns about Brazil solar capacity drop
The planned 2025 implementation of the auction system has sparked considerable concern within Brazil’s solar energy sector. Sauaia emphasized that the regulations were developed without adequate public consultation, a move that could undermine investor confidence and decelerate the country’s renewable energy expansion.
He stressed that distributed generation—which includes everything from residential rooftop panels to larger commercial installations—serves as a vital alternative to the traditional centralized generation model. By shifting away from the current system, the proposed changes could inadvertently lead to higher energy costs for both homes and businesses.
This has ignited a broader debate across the industry, with more updates available in the latest Brazil solar news. While officials argue the auctions are a necessary step to ensure sustainable growth, critics fear they will stifle innovation, favor larger players, and ultimately limit the accessibility of solar power for the average consumer.
ABSolar’s Revised Forecast for Brazil solar capacity drop
In light of these regulatory shifts, ABSolar now projects that Brazil will add between 8.5 GW and 12.5 GW of new solar capacity by the end of 2024. This is a sharp decline from the initial forecast of 17 GW.
Looking further ahead, the picture becomes more complex. While 2025 is expected to see a robust addition of 11.4 GW, ABSolar warns that capacity additions could fall by another 24% in 2026 due to these regulatory barriers and high capital costs. Sauaia cautioned that the new rules could jeopardize R$ 1.5 billion (US$ 300 million) in new investments in distributed solar by 2030 and put over 150,000 jobs at risk across the entire solar panel manufacturing process.
Despite these challenges, Brazil’s solar sector has demonstrated incredible resilience and potential. The country has firmly established itself as a global leader in solar power, with a strong foundation in distributed generation and projections still pointing toward stunning 19 GW growth by 2025.
However, the proposed changes to the regulatory framework represent a significant crossroads. As Brazil navigates this transition, the industry must adapt to the new environment while continuing to advocate for policies that support widespread access to clean, renewable energy.
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