Solar distributed generation set for another record year in Brazil

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Solar distributed generation (DG) may be set for another record year in Brazil, as new systems with an aggregate capacity of 140.6 MW were installed under a net metering regime in the first quarter, according to a new report from Brazilian consultancy Greener.

The new capacity, Greener analysts wrote, represents 36.4% of the 386.1 MW record DG figure seen last year and is 137% higher than the small scale capacity added in the first three months of 2018.

Brazil had added a cumulative 715.8 MW under its distributed generation mechanism by the end of March, the Greener report stated, with the leading states Minas Gerais, Rio Grande do Sul and Sao Paulo, which boast 147.4 MW, 117.1 MW, and 87.8 MW, respectively, of DG capacity added under the regime.

Module imports keep growing

Greener says 525 MW of PV panel capacity intended for all segments was imported to Brazil in the January-to-March period, for a 32% year on year comparison rise. Inverter imports for the segment grew even more – around 230% – from 151 MW in the first quarter of last year to 499 MW in the latest quarter, said the consultancy.

Polycrystalline modules accounted for around 81% of quarterly imports, followed by mono PERC products (10%), monocrystalline modules (5%) and polycrystalline PERC panels (4%).

Possible changes to regulation

The rise in module and inverter imports could, however, represent a rush by customers ahead of changes the Brazilian government is considering to its distributed generation regime.

In its report, Greener describes six options electricity regulator ANEEL is considering for the net metering scheme applied to solar systems with a generation capacity of up to 5 MW. Among the proposals only one that is unlikely will be adopted– labelled alternative zero  – would maintain the current tariff, which is broken down into constituent parts to compensate for different costs associated with the PV system including transport, distribution, energy generated, charges and losses.

The other five proposals envisage staged reductions in various parts of the tariff. Greener claims ANEEL is considering a regime which would halt payments for the distribution part of the tariff once the total capacity of systems under the “local generation” category, which includes sytems for self-consumption under net metering that are not allowed to export energy to other power consumers in the same distribution networks, reached 3.3 GW, with that cut-off figure set at 1.25 GW for systems which are given this option and are included in the “remote generation” typology.

Such an overhaul would extend the payback period for DG systems from five to six years, according to Greener’s calculations.

Leading solar states would suffer

The capacity caps which would halt part of the tariff would be calculated in each utility service area. “In this way, the most important markets – Minas Gerais and Rio Grande do Sul – would be impacted very soon,” Greener technical analyst Rodolfo Castro told pv magazine. “It is very important to point out that all this is ANEEL’s suggestion, it doesn’t mean the regulation will change in this form.”

Net metering rules were issued by the Brazilian government in 2012. In 2016, they were improved with new financial conditions for project loans and an increase in the size limit of eligible projects to 5 MW.

The government is supporting distributed generation through Convention 16/15 (Convenio ICMS 16/2015), which exempts the owners of solar power systems with a generation capacity of up to 1 MW from paying the ICMS state sales tax, under the net metering program.

ANEEL is aiming to bring 886,723 PV systems under net metering rules by 2024.