Is solar energy (really) competitive in Brazil?
- Dec 21, 2022 4:45 pm GMT
This question is often asked to me. By homeowners (my neighbors) and by executives of companies and institutions. who are contemplating the possibility of investing in solar.
The most obvious and accepted answer is: of course! Just look at the penetration that solar already has in the market!
My assessment is presented in a summarized and simplified way in the table, which compares the cost between two solutions. The results show that:
1.On the side of the electricity sector production chain only
When installing a photovoltaic solar system, the cost of delivered energy increases by 32%.
The reason for this increase is simple. The same investment made in generation, transmission and distribution generates lower sales (since the solar system "steals" a volume when there is insolation).
2. On the side of investors
Adding the investments made by the electricity sector and in solar systems, the cost increases by 50%.
Conclusion: the photovoltaic system, looking at it systemically, increases the cost of energy.
But...why has it been so popular in Brazil?
1.) Incentives for those who install solar
2.) The additional costs derived from solar are transferred to all regulated rates
These two factors combined reinforce the drive to install solar in an artificial way! This is especially so because the country's power mix is renewable, so when installing solar one is not replacing fossil fuels but other renewables. And make things worse, hydro and wind operate with a capacity factor (installed capacity x delivered energy) that is typically 2-3 times the solar one.
And of course I am not even mentioning the "duck curve" additional costs.
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