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Proposal For Solar Energy Capture Rate Sent To The Senate Likely To Be Withdrawn, According To Senator.

Written by Paulo Nogueira
Published on 30/11/2021 at 02:36
Updated on 30/11/2021 at 19:19
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The Taxation of Solar Energy Probably Will Not Be Approved in the Senate As Is, According to Senator Nelson Trad from PSD.

Senator Nelson Trad from PSD commented last Friday that the bill for the taxation of solar energy generation will not be brought to the Senate Floor, as it was approved in the Chamber, and it will probably be removed from the agenda. According to him, there is information that needs to be modified and verified for the text to be definitively approved in the Senate.

The text, authored by Senator Silas Câmara (Republicans-AM) and reported by Deputy Lafayette Andrada (Republicans/MG), has received mixed reactions, as there are valid points regarding the fact that people who generate their own energy still use the network managed by the utility company. However, there is concern that this tax may discourage the market that is still not widely popularized in Brazil.

What Is the Argument for Taxing Solar Energy Generation?

It is based on the assumption that even if the generation is done entirely individually, whether residential, commercial, or industrial, it is still only supplementary. In other words, there is still a reliance on energy generated by the utility company and the use of the electrical grid, which is the responsibility of the utility. In this sense, the tax would come to cover the utility’s expenses for maintaining the electrical grid, and according to those who support the original proposal that came from the Chamber, this tax would stimulate job creation within the energy sector.

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The Senate is Likely to Modify the Text of the Solar Energy Taxation Law, Known as the “Solar Tax.” At this rate, it is possible that this law will not be approved before 2022. Source of the image: EBC

What does the original base text of the law say? The tax would be charged gradually from 2023 to 2029, with the 2029 amount being the final tax value.

People and businesses that already have solar panels at this time will be exempt from payment until 2045.

Could the Solar Energy Generation Tax Slow Down the Solar Market in Brazil?

One of the biggest fears of those against this taxation is that it would slow down a market that has been growing exponentially in Brazil year after year.

The growth of decentralized solar energy is significant, especially with the considerable increase in the price per kilowatt hour generated by utility companies due to the difficulties of the water crisis.

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One of the issues that the approval of the solar energy generation tax would bring at this time is a considerable sense of urgency, as people and businesses interested in having this system would seek speed in getting it, since with this matter being approved in 2022, there is a chance that there might be a deadline until 2024 for the tax to start being charged, and those who install their solar panels before the approval will be exempt from the tax until 2045.

What Would Be Done with the Collected Resources?

The solar energy generation tax bill provides that the revenues collected from these taxes would be directed to social projects involving the democratization of solar energy for the less privileged.

In other words, while it discourages the installation of private solar panels for some clients, the intention is to promote the installation of solar panels in low-income residences, similar to what was done when television signals were switched from analog to digital, and many families receiving welfare received decoders so they wouldn’t be left without TV.

Even though it has been under discussion since 2019, the solar energy generation tax law will have to return to the Chamber if it is altered by the Senate. After passing through both houses, it will finally be reviewed by the president, who has the power to veto articles or the integrity of the text, which would cause it to restart the process in the Chamber of Deputies in Brasília.

Paulo Nogueira

Eletrotécnica formado em umas das instituições de ensino técnico do país, o Instituto Federal Fluminense - IFF ( Antigo CEFET), atuei diversos anos na áreas de petróleo e gás offshore, energia e construção. Hoje com mais de 8 mil publicações em revistas e blogs online sobre o setor de energia, o foco é prover informações em tempo real do mercado de empregabilidade do Brasil, macro e micro economia e empreendedorismo. Para dúvidas, sugestões e correções, entre em contato no e-mail informe@en.clickpetroleoegas.com.br. Vale lembrar que não aceitamos currículos neste contato.

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