Brazil: BYD to deliver local modules for auction projects

Chinese manufacturer BYD is set to deliver glass-glass modules produced locally for winning projects in the Brazilian solar auctions, the company has told pv magazine.

BYD will open a solar module production facility in Campinas, in the Brazilian state of Sao Paulo, in the second quarter of next year.

The factory will have an initial capacity of 400 MW. "We will start the first line with 200 MW and we will extend to 400 MW," said Adalberto Maluf, BYD’s director of marketing and government relations, during the Intersolar South America event in Sao Paulo. The company will invest some BRL 150 million ($40 million) in the factory.

BYD will deliver modules for winning projects from both national solar auctions that took place last week and last year in Brazil and in which about 2 GW of projects were awarded. "Some of our clients were successful," Maluf said.

The delivery of the modules will take place at the end of 2016 and in 2017. Winning projects in both solar auctions are to start operations in 2017. "The initial capacity of the production will be delivered exclusively for the winners of the tenders," he added.

The company also expects to deliver modules for the winning projects of Brazil’s next auctions. The next solar auction will take place in November. "We are optimistic for the next tenders," Maluf said.

Winning projects in national solar auctions can access financing from the Brazilian development bank BNDES if they comply with local content requirements. Local content requirements in modules apply for projects that are to go online in 2017.

The Sao Paulo factory is the first BYD plant in Latin America. The company registered before the end of the May deadline to participate in the national Padis incentive program, which is currently on hold. BYD is confident that the government will support the companies that registered before this deadline.

Several manufacturers have applied to participate in the Padis incentive program for the semiconductor industry. The program was originally set to be extended but Brazilian President Dilma Roussef vetoed parts of a bill that contained the extension of the program in August.

Tax reductions may boost distributed generation

Maluf also pointed out how the recent tax reductions approved in Sao Paulo and other Brazilian states could boost the distributed generation market. As of September 1, several Brazilian states have introduced tax reductions to promote renewable energy installations.

As a result, Maluf said that the payback will be shorter. "Instead of eight years payback now we are seeing six-and-a-half or seven years payback, sometimes six years." BYD will also deliver modules for decentralized generation.

A lasting drought in Brazil has resulted in less hydropower and a rise in the electricity prices, which has in turn made solar more attractive in the country. "Brazil is going to through some rough years in electricity generation so prices are going to remain high for the short term and mid term, which makes solar PV a very promising market in the future," Maluf said.