Brazil’s solar sector is entering a new phase marked by budget cuts, grid restrictions and regulatory shifts, with growth increasingly linked to new business models and market dynamics. Industry leaders say storage will be central to this transition, enabling system integration, mitigating risk and unlocking future demand.
The opening session of the Intersolar Summit Northeast Congress in Fortaleza (CE) highlighted a solar sector undergoing rapid transformation, shaped by structural challenges and new market opportunities. Rodrigo Sauaiaexecutive chairman of AbsolarAnd Barbara RubimCEO of Clear strategiesagreed that the growth of solar energy in Brazil has entered a new phase.
Sauaia highlighted the leading role of the country’s northeast in solar energy expansion, with about 74 GW of the 117 GW of projects under development in the region, compared to a national energy mix of about 265 GW. He said states like Ceara are at the heart of the current tensions in the sector, mainly due to the contraction in generation production, which has significantly affected projects.
“The expansion of the free market, which already accounts for 43% to 44% of national consumption, opens up space for solar growth through new business models, but requires a complete shift in companies’ approach,” he said, adding that the sector must move beyond selling systems and focus on offering integrated energy solutions, including storage.
In this context, the recently introduced Law 15.269 marks a milestone, introducing provisions such as the inclusion of surcharges in the legal framework and tax incentives. However, Sauaia pointed to controversial elements, including the allocation of contract costs for battery reserves solely to generators, which could increase rates and lead to disruptions.
“Storage has finally been written into law, but with provisions that still need to be amended, especially regarding cost allocation and implications for future auctions,” he said.
He also flagged what he described as a “regulatory disruption,” arguing that access to Special Incentive Regime for Infrastructure Development (REIDI) benefits for solar projects is tied to battery uptake, which could increase costs and reduce competitiveness.
Distributed Generation: Delays and Limitations
On the distributed generation front, Rubim said the segment continues to grow in absolute terms but shows signs of slower percentage growth, due to both market maturation and regulatory and technical constraints.
“Micro generation continues to grow steadily, while mini generation is already declining, with new projects becoming unviable due to connection constraints and reverse energy flow constraints,” she said.
She noted that the perception of continued growth often ignores the role of existing projects that were approved before recent regulatory changes. New mini generation projects are now facing a more challenging environment.
Grid saturation is another problem. Rubim said some regions with high penetration of distributed generation are approaching or exceeding 20% – a level where international markets face structural challenges.
“This does not mean that distributors are always right to deny connections, but physical boundaries must be recognized. Assessments must be technical, at transformer and substation level,” she said.
She added that regulatory uncertainty – especially around future compensation mechanisms and the rollout of time-of-use fees – is influencing consumer decisions. Consumers already bear approximately 60% of the costs of the low-voltage grid and are faced with uncertainty about the payback period of the system.
Storage is gaining momentum
Both speakers identified energy storage as a key driver for the next phase of the sector.
Sauaia said storage will be critical not only to ease the curtailment but also to unlock new demand from segments such as data centers, green hydrogen and industrial electrification.
Rubim emphasized the role of batteries in managing demand and balancing generation and consumption, especially in distributed systems.
“The future of distributed generation is hybrid. Batteries are the new distributed generation,” she said. “They enable load shifting, lower tariff costs and greater predictability, an increasingly important factor for consumers.”
She said hybrid systems are already showing an average payback period of about five years, combining savings, backup capacity and greater energy independence. However, adoption remains limited by barriers such as a lack of installer training.
The opening session underlined a clear message: Brazil’s solar sector continues to grow, but is entering a more complex phase where regulations, infrastructure and technology must evolve together.
Between generation cuts, grid saturation, and regulatory changes, the next phase of growth will rely less on installing panels and more on the industry’s ability to integrate solutions, with storage being central to this shift.
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