Developing Brazil’s Market for Distributed Solar Generation
Published: October, 2017
Brazil meets almost 45% of its energy demand through renewable resources. While this makes the nation’s energy supply one of the least carbon-intensive in the world, the increase of nonrenewable sources in the Brazilian energy matrix from 2005 to 2015 highlights the challenge the nation faces in meeting its climate goals.
Renewable resources are at the center of the discussion on how to move towards a clean and reliable energy system around the world and are seen as a key instrument in combatting greenhouse gas emissions and climate change.
However, new analysis by researchers at Climate Policy Initiative/ PUC-Rio (CPI) shows that the development of the renewable energy sector occurs not only through the availability of natural resources, i.e., determinants of supply, but also through aspects of demand, such as income, population and electricity tariff.
Brazil especially holds potential for advancing its level of solar energy through distributed generation, which generates power on-site at the point of consumption, i.e., in a decentralized way, and has a small, but established market in parts of the country.
In this new study, CPI researchers analyzed 5,563 municipalities in Brazil and show that demandside factors drive consumer uptake of PV distributed energy generation. This effect is so relevant that municipalities with lower annual solar radiation have, on average, more consumer units of distributed solar photovoltaic generation than municipalities with higher levels of radiation.
The analysis is one of the first to examine the decentralized solar generation market at a municipality level, yielding unique insights to this emerging industry.
- Municipalities with lower annual solar radiation have, on average, more consumer units with distributed solar photovoltaic generation than municipalities with higher annual radiation levels.
- Municipalities with higher Gross Domestic Product (GDP), population, and electricity tariffs have greater numbers of photovoltaic units in Brazil.
- Only 1,478 municipalities out of the 5,563 municipalities studied had at least one photovoltaic solar unit in 2017.
- The highest number of photovaltaic units in a single municipality was 436 in Rio de Janeiro in June 2017.
- Target policies on renewables aimed at climate risk mitigation to address demand-side factors such as income, population, and electricity tariff, in addition to promoting supply-side availability of natural resources.
- Consider how the differences in tariffs across the country may have consequences on the penetration of photovoltaic between different regions of the country.
- Incorporate the promotion of renewable energy sources into development strategies that address the poorest regions of the country, which also have the highest solar potential.
Policy Brief – Developing Brazil’s Market for Distributed Solar Generation(4.5 MB)
Resumo – Geração fotovoltaica distribuída(4.5 MB)
Working Paper – Distributed Solar Photovoltaic Generation in Brazil(421.2 kb)
- climate policy
- energy access
- energy efficiency
- energy finance
- energy infrastructure
- low carbon economy
- low-carbon electricity system
- public policy
- renewable energy investment
- sustainable cities