Net Zero Summit

Brazil sees solar boom ahead of cut in subsidies for new projects

Power utilities and developers are rushing to register solar projects in Brazil, one of the most promising markets for renewables, as it prepares to cut subsidies for new solar installations and wind farms, according to a report by consultancy ePowerBay.

Spain’s Iberdrola, France’s Voltalia, EDF, Italy’s Enel and Portugal’s EDP Renewables are among the main players developing solar projects in Brazil, as well as Atlas Energia, controlled by the British private equity firm Actis, ePowerBay said on Tuesday.

Only projects registered with the electricity industry regulator ANEEL by March 2022 will benefit from the subsidies, which will be scrapped. The subsidies halve the price renewable projects pay for the usage of transmission networks.

“Certainly the looming end of the subsidy has accelerated the seeking of approval for new projects by developers, primarily for the solar ones,” the consultancy said.

Last September, before the government proposed the law cutting subsidies, investors had filed requests with ANEEL for the development of 8.7 gigawatts (GW) in new renewable projects. In March, after the law passed, requests for new projects jumped to 18 GW, lead by solar projects.

The volume of projects seeking approval in just the month of March surpasses many times over the total capacity of solar parks currently operational in Brazil (3.3 GW).

According to ePowerBay, Voltalia registered 4 GW in new solar projects with ANEEL, followed by Iberdrola (2.1 GW), EDP Renewables (1.75GW), Atlas (1.2GW), EDF (1GW), and Enel Green Power (910 megawatts).

Oil majors are also betting on the Brazilian renewables market, the consultancy said, with Royal Dutch Shell registering solar projects totaling 1.5GW, while Total Eren, owned by France’s Total, has already obtained approval for 49 megawatts in solar projects.