Confidence is rising in the Brazilian PV market

High enthusiasm was definitively present at Intersolar SA in Sao Paulo, held from 22^nd to 24^th of August.

The 222 exhibitors offer the growing PV industry in Brazil solutions for the entire supply value chain. Although the event’s focus was given to distributed generation, a good amount of companies displayed solutions for storage, which is expected to participate strongly to the future deployment of PV in the country.

Thanks to strong growth of over 300%/year since 2014, confidence is rising that the market will continue its development and consolidation. This is based on the realistic concept that the market will take from two to five years to mature and to establish the required infrastructure for the mass roll out of PV throughout the country through different market segments.

According to Rodrigo Lopes Sauaia, President of ABSOLAR, the Brazilian association of the PV industry, the market is expected to grow by another 300% in 2017 and to see 20,000 PV systems connected to the grid at the end of the year, despite the 4^th year of economic stagnation and unstable political environment. More than 1 GW is expected to be installed with over 850 MW large scale projects and 150 MW DG projects at the end of this year.

During his opening speech at Intersolar SA, Sauaia announced that 23 states in Brazil have now confirmed ICMS exemption for net metering, in comparison with only 11 states one year ago. Only four states, namely Amazonas, Espiritu Santus, Parana, and Sant Catharina, are still excluded.

A new 10-year development plan issued by the government of Brazil is currently under consultation, with the target of 10 GW for centralized and 3.5 GW for decentralized generation by 2016. The confirmation of this plan is expected to give an important signal to the local value chain and give confidence for investment in solar.

Despite the current depression phase in the Brazilian economy, PV is being adopted by many enterprises as an alternative business opportunity.

The large amount of players acting as solar installers surpasses the market demand, which seems to bring down the offered pricing. Daniel Kunz from TRITEC Energy do Brasil, who recently founded the PV Installers Association of Bahia, said to pv magazine that only 5 of the association’s 80 members have confirmed orders, which shows that consumers in Brazil still need to be informed about the benefits of PV.

With high electricity prices (especially in the most developed states such as Rio de Janeiro, Sao Paulo and Minas Gerais), severe drought in the 5^th year and decreasing cost of installations, PV's competitiveness is increasing quickly. These factors add to the current red flag on hydro production, due to priority given for water supplies to the population and agriculture.

Financing remains the main challenge for all players, and one of the main bottlenecks. Risk of PV is still evaluated at high at local banks, and strong fluctuations in the local currency do not allow a risk-free investment environment.

According to the Intersolar SA’s organizer, Solar Promotion, the event was attended by 222 exhibitors from 14 countries (up 14% from the previous edition) and around 12,000 visitors from 46 countries.

Article by Fabienne Cuisinier