Solar developers rush on Brazil ahead of subsidy phase out

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Image: M.J. Ambriola/Flickr

International renewables developers are rushing to secure projects in Brazil before the government takes away subsidies for new solar and wind farm installations next year.

That’s according to a report from Brazil-headquartered consultancy ePowerBay, which said that developers filed requests for 18GW worth of renewables projects last month after a law was passed that will phase out subsidies. Developers will need to register projects with the industry regulator, ANEEL, by March 2022 in order to still have access to a subsidy that slashes the price of transmission network usage by 50%.

The end of Brazil’s transmission network price subsidy, the report said, is “accelerating the search for the granting of authorization by the developer companies, mainly for solar projects.” When the new law was brought forward in September, renewable energy companies filed 8.7GW of new project capacity requests with ANEEL, but once the law was passed six months later, that figure more than doubled, driven by solar, according to ePowerBay.

The further development of solar power technology, more efficient panels and falling manufacturing costs has lead to solar “driving new projects” in Brazil, with developers securing 4.9GW of installed capacity in issued licenses since last September, close to double the 2.5GW secured for wind projects.

While local energy companies such as Aurora Energias and Pacto have the most installed solar capacity in the country, global developers such as Total Eren, Canadian Solar, Voltalia in France, and Portugal-headquartered EDP have all been issued grants for solar projects since last September, before the government proposed cutting new renewables subsidies. ePowerBay’s research found that Voltalia, New Energies and Aurora Energia have filed the largest number of requests for new solar projects.

A number of large-scale Brazilian solar projects have been announced this year as the country moves to phase out its subsidy. Last month, Spain’s Powertis broke ground on two solar parks in São Paulo and Minas Gerais totalling 225MW capacity, while local company JKL Energy is planning to develop a 1GW PV project in Piauí.

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