IN DEPTH: Brazil's small PV thinks big

Micro-PV is gaining the trust of Brazilians

Micro-PV is gaining the trust of Brazilians

Brazilian PV power installation is accelerating in 2014.

The sector’s pioneers are overcoming distrust and working out how to take full advantage of two-year-old legislation that allows small domestic and commercial installations to sell excess power to the grid.

Data from power regulator Aneel shows the number of such micro-generation projects authorised since the beginning of 2014 is almost a third of what was permitted for the whole of 2013.

According to some market players, by the end of this year this could help to almost triple current operating solar installed capacity from the current 5.9MW.

“By the end of the semester we expect to install 2MW more and by the end of the year, we expect to reach 10MW,” Nelson Cortes da Silveira, CEO of solar PV installation start-up Brasil Solair, told Recharge.

Solair imports solar cells and inverters from China's Linuo and KLNE respectively.

On February 12 this year it was authorized by Aneel to start commercial operations of 2.1MW of solar capacity in the Morada do Salitre and Praia do Rodeadouro residential condominium in the northeastern city of Juazeiro, in Bahia state.

Solair was created in 2009 with some R$30m ($12.8m) investment from a group of 13 private Brazilian investors. Since its foundation, Solair has been negotiating with suppliers and developing business and financing models.

Its average contracts are for businesses and range between 25kW and 30kW of installed capacity.

“Sorting out the finance is the most important issue, because Brazilians don't trust the technology and don't understand the long-term payback needed,” he said, referring to the country's history of high inflation and economic instability that lasted until the mid 1990s.

Solair's first large scale project in Juazeiro is in fact a combination of 180 micro connections on the rooftops of a low income housing project financed by the government.

The company will manage the energy using smart grid technology and sell it wholesale to Caixa Economica Federal (CEF), Brazil's federal savings bank that also finances the federal government's low income housing program Minha Casa Minha Vida.

The proceeds from the sale will be paid to the condominium managers, covering all costs, and what is left will be paid out monthly to the 1,000 families who live there.

According to Cortes da Silveira, Solair will sell the power at same price that local power distributor company Coelba charges.

“The end result should come to about R$80 per month per family,” said Cortes da Silveira. In one year, this adds up to R$960, or about 50% of Brazilian's average annual income in 2013.

Solair's project is one of some 30 solar power projects authorized by Aneel in 2013 that brought Brazil's operating solar capacity to some 5.9MW by February. Most of the projects registered are under 10kW of installed capacity.

So far this year projects authorised by Aneel add up to 1.042MW, including the solar stadium Arena Pernambuco, one the World Cup 2014 venues, with 967kW.

The rest are small residential, commercial and industrial operations ranging between 2kW to 5kW in installed capacity.

“It seems that the distrust has been overcome because there are enough practical examples now,” said Mauro Passos, president of the NGO Instituto Ideal that promotes solar PV micro-generation in Brazil and has a partnership with Germany's Grüner Strom Label fund. The fund has R$65,000 to disburse for project development and installation.

According to the German fund's manager in Brazil, Peter Krenz, who analyses projects and authorizes the fund's disbursements in Brazil, projects have been improving in technical quality as companies gain knowhow and, as a result, reducing installation prices.

“Not only the number of projects submitted to us have grown, but for the first time we are seeing a reduction in installation costs to below R$7,000/kW,” he said.

Solair, by comparison, estimates its installation costs at R$5,000/kW.

Brazil's Energy Planning Company (EPE) estimated in its 2022 Energy Expansion Plan (PDE 2022) that solar PV would reach an installed capacity of 1.4GW by 2022 mainly through small micro-generation projects since the technology cannot yet compete in the wholesale energy market with wind nor with hydroelectric sources that have prices around and below R$100/MWh respectively.

This occurs despite the fact that Brazil has several times the insolation levels of Germany. Solar PV prices are in the R$300/MWh range.

“What is making the difference here in Brazil are retail energy prices," said Passos. “If we map out the installations we can see that they occur where there is a combination of high electricity tariffs and high insolation”.

According to Aneel's data, the states of Rio de Janeiro, Paraná, Minas Gerais and Mato Grosso do Sul are where most of the new micro-generation projects were located.

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