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Brazil's PV market is booming, with installed capacity exceeding 40GW

published: 2024-04-30 17:41

In the first quarter of 2024, more than 4GW of PV capacity was added to Brazil's power system, according to the latest data released by ABSolar, the Brazilian photovoltaic association. Of this, about 2GW comes from large-scale PV power plants and another 2GW from distributed PV systems. As of the end of March, Brazil's cumulative installed PV capacity had reached 41GW, of which 13GW were utility-scale PV projects and 28GW were distributed PV.

Over the past decade, Brazil's solar power generation has shown phenomenal growth. From only 8MW of installed capacity in 2013, it has reached 34.9GW by the end of 2023, and exceeded 40GW at the end of March this year. Brazil's photovoltaic power generation has increased more than 4,300 times over the past decade, making it the country with the largest installed photovoltaic power generation capacity in Latin America.

Shortlisted as the top 4 in the global photovoltaic installed capacity

More than 85% of Brazil's electricity is now generated from renewable sources, and photovoltaics have become the second largest source of electricity generation in Brazil, ranking second only to hydropower and surpassing wind in terms of installed power capacity. To date, 2.3 million rooftop PV systems have been installed in Brazil, with the potential to install more than 90 million rooftop PV systems.

In 2023, Brazil added more than 10GW of PV capacity, with a cumulative installed capacity of more than 37GW, making it the fourth largest in the world, behind China, the United States and India. The pace of deployment of PV systems in Brazil is staggering, with 70% of them rooftops, exceeding 1GW per month, and doubling the installed capacity of rooftop systems every two years.

Brazil is blessed with solar radiation resources and has become one of the pioneers in the development of renewable energy in South America. Today, Brazil's distributed installed capacity has surpassed centralized power stations, accounting for 71% of the total installed capacity.

The adoption of the distributed generation method has led to the vigorous development of distributed photovoltaic projects in Brazil. As of the end of June 2023, the installed capacity of distributed PV has exceeded 22.381GW, of which 4.431GW was added in the first half of the year alone, and the states of São Paulo and Minas Grasse have both exceeded 3GW.

In terms of centralized PV, as of the end of June 2023, Brazil's installed capacity has reached 9.636GW, with 2.213GW of new capacity. The total installed capacity of ground-mounted PV reached 125.9GW, of which 9GW projects are already in operation, 6GW projects are under construction, and more than 107GW projects are ready for construction.

In Brazil's regulated electricity market, the price of PV has fallen from more than US$100 per MWh in 2013 to US$32 in 2022, and even just over US$20 at its lowest point in 2019. Photovoltaic power and wind power are one of the lowest-cost power generation technologies available.

In the future, the Brazilian solar market is expected to grow from 37GW in 2023 to 97.46GW in 2028, with a CAGR of 23.30%.

Ronaldo Koloszuk, President of ABSolar, said: "The increase in scale, the improvement of efficiency and the development of technology have made solar energy one of the main avenues of energy transition in Brazil and around the world.”

Multiple benefits to help

Over the past decade, Brazil's PV industry has grown from scratch and now accounts for more than 15% of installed electricity capacity, laying a solid foundation for the country's clean energy transition. This success is inseparable from the continuous reduction of costs and efficiency of Chinese enterprises in the field of photovoltaic manufacturing.

According to a report by Greener, a Brazilian PV consultancy, Brazil's PV module imports reached 17.5GW in 2023, slightly lower than the 17.8GW in 2022, but up 70% from 10.4GW in 201 and still maintaining a record high. The continued downward trend in PV module prices has driven the acceleration of Brazil's PV imports.

In the second half of 2023, Brazil's PV module import momentum accelerated further, reaching 9.3GW of installed capacity. While the share of distributed PV systems in imported modules has declined slightly, from 75% in 2022 to 65% in 2023, the distributed PV market is expected to continue to grow due to increased demand for utility-scale PV projects.

In the fourth quarter of 2023, Brazil's PV module imports reached 5GW, setting a record for the highest quarter ever. Greener also noted that China exported about 4GW of PV modules to Brazil in November and December 2023, accounting for 90% of Brazil's total imports in the fourth quarter. However, some of these PV modules have not yet arrived in Brazil, which will be reflected in the import data for the first quarter of 2024.

In 2023, the price of solar modules in Brazil fell by an average of 40%, mainly due to the expansion of the Brazilian solar industry. The average monthly electricity bill for a house in Brazil is R$500, while the cost of installing solar energy on the roof is around R$15,000, according to the price simulation table of the concessionaire Portal Solar. Due to the significant drop in module prices, the payback period for users has been significantly shortened.

Favorable net metering legislation, rising electricity prices, and the downward trend of PV module prices in recent years have made PV systems the second largest contributor to Brazil's electricity mix and the fifth largest PV market in the world.

However, Brazil is also actively developing its own PV manufacturing industry and has begun to restrict imports. According to the news on December 12, the Brazilian government announced that it will resume the import tax on photovoltaic modules and wind turbines, and resume import taxes on 324 categories of related products. However, the development of the local PV manufacturing industry is still in its infancy, with less than 5GW of local PV production capacity in Brazil, and the industrial chain is relatively fragile, and many imports are still needed to meet market demand.

Ambitious ten-year energy expansion plan

Although Europe led the world's PV development in the first decade of this century, since then, Asia has been dominating under China and India, and Brazil has broken through under heavy difficulties to become a bright spot in South America. It is reported that the new installed capacity in South America grew by 120% in 2023, of which Brazil's new capacity accounted for 40% of the cumulative total, becoming an important contributor.

Electricity in Brazil is generated through a variety of fuels, with renewable energy being one of the main sources of generation. Currently in Brazil, the electrification of transport, heating, and industry, as well as plans for green hydrogen production, are expected to expand the demand for the installation of large-scale photovoltaic systems in the coming years. As a well-structured energy market with high availability of photovoltaic and wind power, Brazil is expected to be able to produce hydrogen and ammonia at the lowest cost in the world.

In the medium term, factors such as government initiatives such as net metering will continue to promote the development of renewable energy in Brazil, and the flexibility to develop its many sustainable forms of energy can ensure a continued and steady growth in its carbon footprint.

According to EPE's Ten-Year Energy Expansion Plan, by 2030, Brazil's total national installed capacity will reach approximately 224.3GW, with more than 50% of new installed capacity coming from new energy generation, of which the growth in installed PV capacity will be the largest and fastest growing. In the future, utility-scale projects and distributed solar power projects are expected to be launched in various auctions, which will create more opportunities for the future growth of the Brazilian market.



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