A stable economy and booming energy sector are drawing investors away from the stagnant North American and European solar photovoltaic (PV) markets towards Brazil's potential-laden domestic market. Companies from Spain, Portugal, Italy, the United States and China are already seeking to establish a foothold in the market through partnerships. This market excitement is likely to fuel even higher foreign investments.
New analysis from Frost & Sullivan (energy.frost.com), Business Opportunities Assessment for Solar Photovoltaic (PV) Market in Brazil, finds that the market earned revenues of $29.3 million in 2012 and estimates this to reach a whopping $431.1 million in 2017, growing at a remarkable compound annual growth rate of 71.2 percent. The study covers the centralized, distributed and isolated power generation segments. The technologies presented in the study are solar panels, inverters, smart grid, electronic meters, and energy management systems.
The 2014 FIFA World Cup is expected to give a huge boost to the market, with PV anticipated to account for 25 MW of power in the event's solar stadia. The opportunities from these mega events are backed by Brazil's natural advantage of extremely high incidence of solar radiation throughout the year. In 2013, its minimum annual solar radiation is 30 percent higher than the maximum annual solar radiation in Germany.
While the country holds several attractions for investors, it also grapples with regulatory challenges. Both enterprise and residential clients are hesitant to implement PV systems due to solar energy's high prices and the lack of a specific line of financing. As such, market participants are heavily dependent on government support.
"Existing and potential participants are looking forward to the impending solar auction to define contract prices," said Frost & Sullivan Energy & Environmental Research Analyst Vinicius Vargas. "These auctions will also affect the entire supply chain and help leverage market revenue."
Currently, Brazil has different energy tariffs across the country, which creates pockets of opportunities for companies. PV companies could also explore prospects in the residential segment by strongly promoting their technology.
The market received a fillip from Resolution 482, which mandates net metering to prevent low-voltage consumers from being burdened by high electricity tariffs. This resolution also opens up the market for the distributed generation segment.
"Resolution 482/2012 will expand the use of mini- and micro-generation and the products/credit instruments for acquisition and equipment installation," observed Vargas. "Centralized and distributed generation is tipped to overtake the isolated generation segment, and participants are targeting the former since the government is more likely to back these niches."
On the other hand, the Provisory Measure 579/2012, which offers tariff reductions to residents and industries that use solar power, lowers the solar PV market's revenue inflow. Solar PV companies can offset this restraint to some extent and even gain a competitive advantage by manufacturing and introducing inverters. Inverters are considered a stable technology and will find easier uptake if provided at a fair price with high quality.
All factors taken into account, the market will be best served by targeting medium- and large-voltage consumers (retail, shopping malls, and large infrastructure clients) and encouraging them to self-generate energy for their consumption.
If you are interested in more information on this research, please send an email to Francesca Valente, Corporate Communications, at francesca.valente[.]frost.com, with your full name, company name, job title, telephone number, company email address, company website, city, state and country.
Business Opportunities Assessment for Solar Photovoltaic (PV) Market in Brazil is part of the Energy & Power Growth Partnership Service program. Frost & Sullivan's related research services include: European Marine Generator Set Market, Argentinean and Chilean UPS Markets, and Central and Eastern European Diesel Generator Set Market. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Business Opportunities Assessment for Solar Photovoltaic (PV) Market in Brazil / NC85-14