I moved from Tokyo to São Paulo in 2017 because I believed—and still believe—that Brazil is one of the most important energy markets in the world. I came as a foreign executive and investor, and over these eight years, I have helped attract more than R$2 billion in capital—much of it international—for projects that supply Brazilian homes, businesses, and communities. This capital didn't come because investors like to take risks. It came because Brazil offered a simple promise: clear rules, stable contracts, and a path to growth.
However, an ongoing campaign threatens this prosperous scenario. Concessionaires and centralized generators are working together to reduce the main benefits of distributed generation (DG) — including through changes discussed around Provisional Measure 1.304 and related debates. ANEELI understand the politics, but as a businessman, I vehemently assert that this is a flawed diagnosis that will make Brazil poorer.
Looking at the numbers, it becomes clear. In 2024, Brazil's domestic electricity supply reached approximately 763 TWh (terawatt-hours) — a 5,5% increase compared to 2023. Final electricity consumption was around 650 TWh. This difference is not the "distributed generation problem." The central issue is supplying energy where and when it is needed, especially as demand patterns change with industry, electric transportation, and the next wave of data centers. Punishing distributed generation doesn't solve the timing and location problem. It only scares investors away.
This is important because the strongest economies operate on cheap, abundant, and reliable energy. Look at the United States and China: decades of growth were built on abundant energy at competitive prices. Brazil has natural advantages—hydroelectric power, wind farms, world-class solar irradiation—and has already achieved one of the cleanest energy matrices on the planet. However, the path to sustainable growth is not to pressure families and small businesses that have invested in their own solar panels. Rather, it is to increase total supply and make the grid smarter.
Regarding distributed generation itself, it's no longer a niche market. Brazil has surpassed 5 million consumer units benefiting from distributed generation, the vast majority of which are small domestic systems. This isn't a rounding error—it's a significant portion of Brazilian households whose finances and resilience have improved because policy has allowed them to invest. When you weaken distributed generation, you're not "correcting a distortion." You're telling millions of consumers they made the wrong bet—and you're telling foreign investors they can take their money elsewhere.
So, what is the real problem — and the solution? The problem is delivery: getting electricity from a grid to the point where it is distributed. This means using batteries and having a modern grid. The most recent planning by the Energy Research Company (EPE), the Ministry of Mines and Energy (MME), and the Ten-Year Energy Expansion Plan 2034 (PDE 2034) projects large-scale expansion and signals the growing impact of data centers — about 2,5 GW of additional load by 2037. Meeting this demand safely requires investments on the order of billions of reais in transmission and distribution over a decade, as well as clear rules that attract private capital.
The State cannot — and should not — bear the entire cost. We need to encourage investments in fixed capital in the grid: simplify auctions, accelerate licensing, and allow a tariff and return model that reflects real risk. The PDE 2034 itself signals a need for investment of approximately R$ 153 billion in the next decade for the energy sector. If we pretend that these investments can be financed and, at the same time, undermine investor confidence in adjacent segments (such as distributed generation), we will be deceiving ourselves.
And what about fairness? Critics say that distributed generation “transfers costs.” The answer is not to kill the patient, but rather to price services appropriately, preserving the investment signal. Around the world, regulators have evolved towards distributed energy value structures, time-varying credits, and modest grid service fees that keep households engaged without collapsing the economy. Brazil can do the same. In fact, the ANEEL It is already taking steps to clarify the rules for energy storage, which is precisely where we should focus to balance supply and demand and relieve the grid during peak hours.
There's also a strategic angle. Brazil wants to anchor advanced manufacturing, AI, and cloud infrastructure here. Data centers consume a lot of electricity and are sensitive to uptime. If we want this investment—and the skilled jobs it brings—we need more energy near the load centers and more flexibility (batteries, demand response), not a more direct cost transfer; more capital, not headlines about retroactive rule changes. Investors don't demand perfection. They demand predictability.
As a foreign executive who staked his career—and his family's future—on Brazil, I make this appeal: don't focus on solving something that isn't wrong. If the goal is to reduce everyone's electricity bill and increase productivity, the path is clear:
1. Maintain stable distributed generation (DG) rules and modernize how we assess electricity over time and location.
2. Mobilize private capital for transmission and distribution with long-term, fundable incentives.
3. Size the storage capacity to transfer cheap renewable energy to peak demand times.
4. Speed up approvals so that energy moves at the speed of the economy.
Harming distributed generation may seem like a solution. However, this move will cool investments precisely when Brazil needs them most. The right approach, especially for the policymakers, is to target the bottleneck—that is, distribution, not generation—and send a clear message to families and global investors: Brazil keeps its word. This is how you get cheaper energy, strong growth, and a country ready for data-driven industries that can lift millions out of poverty.
It's pure and simple economics, which also works when it comes to energy. We will ensure that it reaches where it's needed without breaking the trust of those who finance the country's future.
The opinions and information expressed are the sole responsibility of the author and do not necessarily represent the official position of the author. Canal Solar.
