Brazilians Rush To Install Solar Energy Systems To Escape The “Sun Tax”

The “Sun Tax” Will Come into Effect Next Year and Thousands of People Are Already Getting Ahead of Installing Solar Energy Systems to Be Exempt from Taxes on Renewable Energy Generation.

The rise in oil prices in the international market and the arrival of a new legal framework for solar energy generation has expanded the number of investments from companies in solar energy systems. Companies are focusing on the expected increase in demand for 2022. To achieve this, they are boosting stocks and anticipating the acquisition of systems, aiming to sidestep the increased costs generated by the ‘sun tax’. In addition, there are companies planning to expand their distribution centers.

Solar Energy System Installations May Double by Mid-2023

The Brazilian Solar Energy Association (Absolar) projects a record this year, with installed capacity doubling, potentially reaching nearly 25 GW on rooftops of buildings and houses, which represents almost double the capacity of two Itaipu plants, the largest plant in Brazil, with 14 GW capacity.

Last week, the entity reported that solar energy has become the third largest in the Brazilian energy matrix, at 8.1%, surpassing natural gas. It now trails only hydropower and wind generation.

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The kickoff occurred in January when a ‘sun tax law’ was published, which provides for the exemption of sectorial charges until the end of 2045 for those who install a solar energy system by January 7 of next year.

In practice, if consumers produce more energy than they consume, they can feed the excess back into the grid and receive the same amount in credits. This will be converted into a discount on the electricity bill. After this date, the discount will be lower.

Companies Focus on Renewable Energy During the War in Ukraine

For medium and small solar energy systems, such as those installed in residences, small rural producers, and small businesses, this energy credit will be reduced by 4.1% in the first year, and the reduction will rise to 8.1% in the second year.

For shared or remote solar generation systems, the reduction in the value of the credit will be 29.3%. According to experts, due to the war in Ukraine, several companies have intensified their search for clean energy solutions, due to the rising costs of oil and gas.

For the president of Absolar, Rodrigo Sauaia, the rising prices and the ‘sun tax’ will bring solar energy its second year of records. It is estimated that investments will reach R$ 50 billion just this year, more than double the R$ 22 billion recorded in previous years.

Companies Experience Exponential Growth in Solar Energy System Sales

At Win, a distributor of solar devices, the expectation is to record a 300% expansion this year, similar to the level achieved last year.

According to Camila Nascimento, the company’s director, there will be a significant increase this semester, considering that many consumers are expected to leave the installation until the last minute. Therefore, the company is reinforcing its stocks.

The company, which has its distribution center located in Espírito Santo, does not rule out the idea of possible expansion. According to Rodolfo Meyer, president of Portal Solar, his company, which sells and installs solar energy systems, has also reinforced its stocks.

The estimate is that there will be a 500% increase in revenue. The current scenario also boosts generation projects. Trinity Energia will invest R$ 78 million in the installation of three photovoltaic plants in Rio de Janeiro.