Brazil Introduces New Rules for Net Metering for Distributed Generation

Brazilian authorities have introduced new rules to ensure PV systems smaller than 5MW remain eligible for net metering until 2045. Grid charges for prosumers will come into effect in 2023, but the profitability of rooftop PV and small solar parks is still expected to be substantial.

The Brazilian government published its long-awaited Decree 14.300 in the Official Gazette last Friday. These regulations introduce a new regulatory framework for the distributed generation sector, including all renewable energy generation facilities up to 5 MW in size operating under a net metering regime. This segment currently accounts for more than 8.4 GW of Brazil’s 13 GW of grid-connected solar power generation capacity.

The new rules will introduce a new net metering regime from 2023, meaning PV systems installed this year will not be subject to grid charges from January 2023. However, these grid charges will still guarantee a reasonable level of profitability for Brazilian prosumers and will gradually increase over the next few years.

Rodrigo Sauaia, president of Brazilian solar energy association ABSolar, said the new rules would ensure legal certainty by maintaining a net metering scheme until 2045.

The National Energy Policy Council (CNPE) and energy regulator ANEEL will now have 18 months (from the date of the decree) to establish guidelines, costs and benefits for distributed generation that will be implemented after the transition period.

According to CNPE, the Brazilian rules based on CNPE guidelines and Aneel’s calculations after the transition period will have a positive impact on the continued growth of distributed generation systems in Brazil. In addition, according to the agency, lower pay levels under the net metering system can only shorten the payback period for residential PV systems by six months.

Barbara Rubim, Vice President of Distributed Generation at ABSolar, said: “For more than 10 years, Brazilian rules have allowed full offsetting of energy credits for distributed renewable generation. Comparing the new Brazilian rules with good international practice, Brazil is well positioned to further support its distribution electricity generation segment.”