02/09/2015

INTERSOLAR SOUTH AMERICA: Brazil PV industry chief Q&A

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Recharge News

Rodrigo Lopes Sauaia, executive president of the Brazilian Solar Power Association (Absolar), was one of the key industry speakers to help kick off the Intersolar South America conference and exhibition in Sao Paulo yesterday. He talked to Recharge about his hopes for the event and the industry as a whole. 

How is this year’s event different from 2014’s?

This year’s conference is about 70% bigger than last year’s. Additionally, we see a lot of national and international interest in joining the Brazilian market. So there are more players from the value chain around, and also a lot more participants from the distributed generation market.

By the look of this event, it’s almost impossible to imagine that Brazil is entering a recession.

Although the Brazilian economy is now passing through a difficult period, the solar sector is in a booming moment. Our expectation for the small-scale distributed generation market is about 300% growth. That compares with our country facing no growth or even a recession this year. We also see a lot of investments coming in manufacturing.

What were the highs of the last year for the solar industry?

Last year one of the highlights for the market in terms of large-scale development was the first national PV auction in October 2014. This was a landmark for the country.
We have some important developments...this year with taxation reductions for net metering. Different states can reduce taxation that is produced locally by small producers.

This is important because it makes solar energy more competitive for the small-scale distributed generation market.

What were the lows of the last 12 months? 

One of the things we are dealing with is that the only industrial policy that was available for the sector is now closed, so it cannot be accessed anymore. This is a bottleneck to the development of the value chain, especially in the manufacturing of PV modules and, in the future, solar cells.

This is one of the reasons Absolar is starting discussions with the government for the establishment of a specific industrial policy for the PV value chain, at least until 2020. We are talking about reducing the taxation for raw materials and fabrication equipment – [which face] 40% to 60% taxes now.

How does this compare with what the Brazilian government did for wind power?

The components that are part of a wind power plant – the towers, the blades and some of the electrical components – don’t have ICI tax or ICMS tax. If this was applied to solar, we would be able to reduce [component] costs by about 30%. This means that solar at the moment is competing at a disadvantage.
 
Despite the recent Brazilian national auctions, several states (Minas Gerais, São Paulo, Piaui, Ceará) are planning their own. Why is this?

When they do their own auctions, [states] foster the development of solar in their regions. This is something they cannot do only with the national auction because they have no control of prices and how they will develop. It is the first time that states are evaluating and developing their own auctions, so it is an important innovation in terms of public policy and governmental push.

What can you say about the future of this industry?

We are very much looking for more competition in the next auction. We believe that from 2016 and onward, we will see projects getting a little tougher as they will have to incorporate local components.
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