Dollar fluctuation: when is the best time to invest in solar?

O American dollar is the most relevant currency in the international market. Its variation influences transactions worldwide, which means that its sudden rise or fall directly interferes with the equipment purchase and sale processes, especially in the solar energy market. 

In 2022, the real has suffered from large fluctuations in relation to the dollar throughout the year: in January, it reached one of its highest levels this year, costing R$5,68. 

Three months later, in April, however, it suffered a sudden reduction, reaching the level of R$4,66. In July, it rose again to more than R$5,50 and, more recently, this week, it maintained its cost in the range of R$5,15. The data was obtained from the Google Finance data platform.

Among the reasons that explain the oscillation of the dollar in the international market are impacts caused by the Covid-19 pandemic and the geopolitical conflicts in Europe, which became more intense after the invasion of Russian troops into Ukraine, in February this year. To the China's threats to Taiwan, with North American interference in the discussion, also explain the exchange rate imbalance. 

In an interview with Canal Solar, Márcio Takata, CEO of greener, one of the main research and consultancy companies in the national photovoltaic sector, explains that distribution chain and solar integration need to keep an eye on these issues, as much of the photovoltaic kits – the major cost element of a solar energy system for the end consumer – has strong exchange rate exposure. 

“We are talking about imported equipment, so if the dollar rises a lot, we are talking about a very significant cost that directly affects the cost for the end customer. In this sense, the strong variation we are seeing in the American currency, which goes up a lot at one time and a lot at another time, brings a strong complexity in relation to pricing”, he explains.

According to him, it is necessary for these professionals to be attentive to market movements with the aim of adapting to the average stock price so as not to lose competitiveness compared to other competitors. “It is a point of attention, especially for the distribution chain and also for integration. Paying attention to month-to-month wholesale price movements is something that makes the operation a little more complex and even more exciting”, highlighted the CEO of Greener.  

Final consumer: when is the time to invest?

According to Takata, for the end consumer, the ideal when adopting a solar energy system is not to speculate whether or not the dollar will rise to buy it cheaper, but rather that an analysis be carried out solely with based on cost, since not even the specialized market is able to accurately determine the real variation of the North American currency over time. 

“I would tell the consumer to look at whether the investment makes sense for them. Does the savings that the solution can generate make sense? Is it attractive at the time of purchase within my purchasing power? This has to be the analysis, in my view, given the uncertainty and complexity of the exchange rate”, advises the professional.