Brazil Solar Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The Brazilian solar energy market is expected to witness a CAGR of around 5.5%, during the forecast period (2020 - 2025). It was the largest solar market in South America that contributed nearly 42% of the total South American solar energy production, in 2018. The primary drivers of the market include government initiatives, like net-metering, to promote renewable energy, to stabilize the growing carbon footprint, and to have a sustainable form of energy.

Net-metering helped customers in getting credits on the bills, by selling excess electricity produced to the grid. However, at the end of 2019, Brazil’s electricity regulator, Agência Nacional de Energia Elétrica (ANEEL), proposed to apply a fee for solar systems with up to 5 MW of power generation capacity, which is expected to hinder the market growth during the forecast period.

With the increasing electricity demand, especially from renewable sources, a number of under-construction, planned solar PV projects are likely to drive the market, during the forecast period.

Brazil, under its latest plan - Plano Decenal de Expansão de Energia (PDEE) 2027, is expected to increase its non-hydro renewable energy to 28% of its electricity generation mix by 2027. This included the increase of solar photovoltaic to 8.6 gigawatts (GW) from 2.4 GW, in 2019. Utility-scale projects and distributed solar generation projects are expected to get rolled out under various auctions, which is expected to create an opportunity for the market to grow in the future.

With a significant solar PV capacity of around 2.4 GW in 2019 and concentrated solar power (CSP) in its very initial state, solar photovoltaic (PV) is expected to dominate the Brazilian solar energy market, during the forecast period.

Scope of the Report

The report on the Brazilian solar energy market includes:

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Key Market Trends

Rising Electricity Demand to Drive the Market

• Electricity generation in Brazil is done through various fuels, and renewables are one of the major sources of generation. With increasing concerns over the climatic change in the atmosphere due to increasing CO2 emission, Brazil, along with various other nations, is concentrating more on electricity generation from renewables. As of 2018, Brazil generated nearly 104.5 terawatts hour of electricity.
• The demand for electricity in Brazil is mostly mitigated by the hydropower facilities available in the country. Hydropower dominates the country, and it accounted for nearly 70% of the country’s electricity generation, in 2018. Hydropower plants are located on the Amazon river basin in the north, but Brazil’s demand for electricity is mainly from the eastern coast, particularly in the eastern portion, which relies mainly on hydropower that may be insufficient.
• Brazil is installing Juazeiro solar plant in the Northeastern state of Bahia, which is estimated to have a capacity of around 156-megawatt power. The project was awarded to Atlas Renewable Energy, during Brazil’s 2015 renewable energy auction. Moreover, the 67.1MWp Sao Paolo solar plant, the 156MWp Sertao solar plant, and the 81.52MWp Sol Do Futuro solar plant are another three under-construction solar projects, which are expected to get commissioned by 2020. The addition of these facilities is expected to mitigate the electricity demand to some extent.
• During 2018, solar facilities generated nearly 3 TWh of electricity that contributes nearly 0.6% of the total electricity generated through renewable sources. With its net-meter policy and decreasing solar energy cost, Brazil's solar energy is expected to increase, during the forecast period.

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