PV pioneer Globo Brasil lays plans to double capacity

Just days after officially opening Brazil's first PV module factory, Globo Brasil is already laying plans to more than double the size of the plant as it chases business in the country's fast-growing solar market.

Speaking on the sidelines of the Intersolar South America event, Globo Brasil executive director and founder Manuel Figueiredo Coelho told Recharge that the company hopes by March 2016 to add a further 200MW of production capacity to its 180MW module-assembly plant in the southeastern state of São Paulo, which opened last week.

The ambitious growth plan would continue the rapid expansion of a business that believes it has a mission to succeed from the highest power of all.

Like most companies at Intersolar South America, Globo Brasil's booth is scattered with business cards and company brochures. But this solar panel manufacturer also offers visitors pocket-sized New Testaments. 

Globo Brasil's motto comes from The Bible's Romans chapter 8: verse 31: "If God is for us, then who will be against us?"

The solar sector is taking off in Brazil but until this year, no company produced modules at commercial scale. Globo Brasil became the first in Brazil to do so and the founders are thanking God for that.

"I came with the idea of water but God delivered me to energy," said Coelho.  

Coelho and his son, Manuel Fábio Tozi Coelho, made their money in the window sealing business. The family sold that business 2014 after 15 years of operation. The water crisis in São Paulo prompted the older Coelho to attend an energy conference in Shanghai. He left the conference with a plan to enter the solar energy business. 

"If I had actually researched the industry and its costs, then I would have never built the factory," Coelho said. 

Instead, Coelho quickly assembled the plant. Within three months of returning from Shanghai, Coelho ordered the manufacturing equipment from Taiwan. The Globo Brasil factory, located in Valinhos, São Paulo, was ready 10 months later. 

The plant is already running at about one-third capacity. Company officials did not reveal the names of its clients, but Coelho said that he expects the plant to be at full capacity within a few weeks.  

Coelho chose a good time to enter the Brazilian solar  market. The federal government wrapped up its second solar energy auction on August 28, when 834MW  was contracted to local and international companies. These companies have two years to start delivering that energy and many will soon start buying modules locally.  

On average, Globo's panels are 20% to 30% more expensive than imported equivalents, Coelho says. 

But the potential for financing from Brazil's BNDES under local-content rules makes Globo Brasil's equipment appealing for large and small clients, Coelho adds. 

In order for large developers to build plants and finance their delivery of power through BNDES, they must use Brazilian components. Since the real is losing value, most international companies would prefer to minimize their financial risk by financing the projects via BNDES. 

In fact, according to BNDES Globo Brasil's PV modules have already received initial accreditation under its five-year local content programme, and the company is in line for meeting the December 2017 deadline to increase local content.

This means that large, utility-scale project developers and mid-size rooftop solar can obtain financing from the BNDES to buy the panels.

But the younger Coelho isn't solely banking on large international and national clients, he said. Although he is expecting some of his initial business to go to such buyers, he wants to focus on operators with projects of 1MW to 5MW.

"If [large companies] come to me, then yes I will accept their business," Manuel Fábio Tozi Coelho said. But I will not come to them. I prefer to start small." 

Coelho is therefore looking at Brazil's also fast growing rooftop market which should speed up among rising power prices and new net-metering rules that are expected to be announced by power regulator Aneel. The revamped rules aim to speed connection to local power grids and increase to 5MW the capacity of arrays that can be included in net-metering schemes.

By 2023, Aneel projects that rooftop solar will reach 700,000 arrays or almost 3GW, up from about 700 arrays with a combined capacity of 5MW.

Coelho said he has already been approached by companies with contracts in the state of Pernambuco, where over 100MW are up for grabs of the total 122MW contracted at a regional auction in 2013. 

The potential revenue for Globo Brasil is high. On average 1W of solar sells for $1 each in Brazilwhich translates to roughly 20% under the per MW installation capex at last week's auctionCoelho said. So 180MW would generate almost $180m. But the costs of producing the panels are also steep, with the solar glass taking up 60% of the costs. 

The Coelhos are hoping that the government will decrease taxes on the panels. If this happens, they say they can lower costs for their clients.