Solar energy
A study of the Controllership-General of the Union The study concluded that subsidies for distributed solar generation put pressure on tariffs and affect lower-income consumers by transferring costs to their electricity bills, according to data analyzed from 2012 to 2024, with information from… UOL.
The CGU (Brazilian Federal Comptroller General) states that consumers without solar panels are financing benefits granted to higher-income users through subsidies embedded in the tariffs charged by distributors, according to the official report.
The analysis considered data from 24 distributors and evaluated the progress of micro and mini-distributed generation, a modality that includes residences and small businesses with photovoltaic panels.
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According to the CGU (Brazilian Federal Comptroller General), if the rules defined by Congress are maintained, the accelerated growth of this generation tends to continuously put pressure on tariffs for consumers dependent on the conventional grid.
“The results indicated a positive relationship between the increase in electricity tariffs and the growth in installed capacity of distributed generation power (DGM).”, notes the CGU, considering the period from 2012 to 2024.
According to CGU technicians, each 1% increase in the average installed capacity of MMGD causes a 0,014% increase in the tariffs charged to captive consumers.
According to the agency, this mechanism creates a feedback loop in the electricity sector, with tariff increases stimulating new installations and reducing the number of paying customers connected to the grid.
“The tariff death spiral is becoming evident.“This is described in the CGU study, when explaining the relationship between higher tariffs and the continuous expansion of distributed generation.”
In this scenario, rising tariffs encourage consumers to install solar panels, which reduces revenue for distributors and generates subsequent tariff adjustments.
Data from National Electric Energy Agency They indicate that, in 2023 alone, subsidies for distributed generation totaled R$ 7,1 billion, a value 260% higher than that recorded in 2022.
Of the total, 55% was paid by consumers without solar panels, 34% resulted from losses by distributors, and 11% came from the Energy Development Account.
The CGU (Brazilian Federal Comptroller General) highlights that the impact of these subsidies is socially unequal, affecting more intensely families with lower purchasing power who are dependent on the social security system.
“Consumers with higher purchasing power consume more energy.“The CGU states that the electricity bill functions as an indirect indicator of wealth,” says the CGU, indicating that the electricity bill acts as an indirect indicator of asset wealth.
According to the report, cross-subsidies transfer resources from the poor to the rich by reducing costs for those who have the capital to invest in solar panels.
This dynamic reinforces inequalities in the electricity sector by concentrating financial benefits among consumers with greater initial investment capacity.
The document indicates that the accelerated expansion began in 2017, when photovoltaic generation started to double annually, according to data consolidated by the CGU (Brazilian Federal Comptroller General).
In December 2024, distributed solar generation reached 36 gigawatts, surpassing the 17 gigawatts of centralized generation in the country.
Since 2021, solar panels have accounted for approximately 70% of total distributed generation, according to the CGU (Brazilian Federal Comptroller General), consolidating the technology as dominant in this segment.
According to the CGU (Brazilian Federal Comptroller General), the subsidies granted by Congress, extended until 2045, are at the heart of the structural problem identified in the electricity sector.
These incentives include exemptions and discounts that have made the technology attractive, but on a scale greater than necessary to stimulate the market, according to the agency.
The study indicates that distributors began operating with over-contracting above the permitted limit, compromising financial results and investments in the electricity grid.
The report also identifies operational risks, as solar generation is concentrated during the day, requiring hydroelectric power in the early evening.
The delay in activating these power plants contributed to blackouts recorded in the Southeast region in 2024, according to the CGU (Brazilian Federal Comptroller General), when analyzing recent events in the system.
This operational imbalance increases costs and technical challenges in maintaining the reliability of electricity supply during peak hours.
Given this scenario, the federal government raised the import tax on solar panels for the third time in 2024, according to the CGU (Brazilian Federal Comptroller General).
The tax, which was zero under the previous administration, rose to 6%, then 9,6%, and has reached 25% under the current administration.
The measure aims to curb distortions in the sector and reduce the impact of subsidies on electricity bills.
The government is considering raising import tariffs on solar panels again to stimulate domestic production and strengthen the Brazilian industry.
According to the CGU (Brazilian Federal Comptroller General), the discussion is taking place while subsidies remain in effect until 2045 and the electricity sector faces continuous tariff pressures and persistent operational challenges.
With information from the Center of the World Diary.
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