The Launching of the Solar/PV Power Declaration:
Following the “Wind Power Declaration” that the State of Rio Grande do Norte launched in 2009, which ended up boosting wind power in Brazil, the Rio de Janeiro Environmental Secretary and Federal Universities of Rio de Janeiro UFRJ and COPPE launched a “Solar Power Declaration” on August 18, 2011. The document contains proposals to foster photovoltaic/solar energy (PV) in Brazil not only in the form of distributed energy, but also utility-scale solar power projects. The pro-solar document recommends power transmission and distribution tariff reductions; inclusion of PV in the Brazilian renewable energy incentive program (PROINFA); specific PV power auctions; technical capacity building programs; industrial policy to encourage supply chain in Brazil, among other proposals.
Most Brazilian states already exempt solar/PV and wind power equipment from VAT tax. More recently, on September 29, 2011, Rio state issued Decree number 43210 exempting the entire wind or photovoltaic power supply chain from VAT tax, including power tension inverters and load control equipment. Additionally, in the case of the State of Rio de Janeiro, Decree number 41318 of 2008 implemented a power compensation mechanism that calls for renewable energy generation or energy efficiency projects whenever a thermal (fossil fuel) power plant is installed in Rio.
Aneel is collecting inputs for a Regulatory Framework:
In August 2011, the Brazilian Power Regulator Aneel launched a strategic R&D PV program (“Chamada 13”) aimed at stimulating PV cost reduction, inserting PV in the Brazilian energy matrix, increasing technical capacity building, and further developing the domestic PV supply chain. Several power utilities presented about 20 projects under this program. These projects will enable Aneel to design a PV regulatory framework and propose fiscal incentives to make PV more economically viable.
Additionally, Aneel is taking public suggestions for a net metering system in which power consumers of micro-generation plants (*) would receive credits back on their electricity bills proportionally to the PV micro generation they install on their premises. Net metering is different than the so-called “feed-in” tariff mechanism already in use in some countries. Under the “feed-in” concept, micro power generators receive certain financial compensation.
Aneel published another proposal in August 2011, also under public hearing, called “Chamada # 42”. The goal is to receive inputs for the reduction of barriers to install micro and mini PV generation. Aneel considers microgeneration (*) as those units with installed power capacity lower or equal to 100 kW, and powered by by solar/PV, wind, biomass, small hydropower or some specific clean cogeneration. They need to be connected to a low-tension grid. Mini-generation is for power generation above 100 kW and lower or equal to 1 MW. They also need to be generated by solar, wind, biomass, small hydropower or clean cogeneration connected to the power utility grid.
According to Aneel studies, estimated PV micro-generation would cost R$ 500 to R$ 600 per MW/h (approximately US$ 280 to US$340 per MW/h). Comparing these costs to the current costs that consumers from some power utilities already pay, Aneel believes that PV micro-generation might be attractive to consumers served by approximately 35 of the Brazil’s existing 63 power utilities.
Changes in power transmission and distribution tariffs are also included in the Aneel 42 public hearing proposal.