Brazil Moves on Solar, Continues Wind Auctions

Brazil, which so far has just one utility-scale solar plant (1 megawatt), is getting ready to grow the industry.

In the next couple of weeks, two incentives will push solar forward. One is similar to the net metering policy widely used in the US – it allows owners of small solar systems (homeowners and businesses) to sell excess electricity back to the utility.

Solar system owners will be billed for the difference between the electricity they consume and the excess that’s sent back to the grid.

The other incentive is for utilities – their taxes will be discounted 80% for energy distributed from large solar projects.

Brazil has been moving along much faster on wind energy. In its first auction, where developers bid for the right to develop wind, hydro, biomass and natural gas projects, wind came in cheaper than natural gas.

In its second auction, held last week, wind beat out hydro in terms of price. The average bid for electricity from wind was $76.18 per megawatt hour (MWh) compared to $83.42 per MWh for hydro.

The projects still need to get financed and built – it remains to be seen whether developers can do that after committing to such low electricity prices. But Brazil’s import tariff on foreign wind turbines has encouraged companies like GE, Siemens and Vestas to open manufacturing plants there, which helps lower development costs.

In 2011, Brazil joined the top 10 renewable energy markets in the world for the first time, as the balance of power for renewable energy shifts to developing nations.

It’s got a 7000 MW pipeline for wind projects through 2016.

Auctions seem to be an important trend for lowering renewable energy prices. California now requires them, and India is successfully using them. In India’s most recent auction, solar came in cheaper than diesel for the first time.

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