The rights guaranteed to DG (distributed generation) consumers since the creation of the segment's Legal Framework are under threat.
The Ministry of Finance proposed a change that brings forward the charge for the use of the electricity grid (the so-called “wire”) for those who installed solar energy systems before the transition rule of Law No. 14.300/2022.
According to a report in the newspaper “The Globe", the initiative was forwarded by the Treasury through a parliamentary amendment to Provisional Measure No. 1.304/2024. The proposal changes the transition rule provided for in the legal framework for micro and mini distributed generation.
Under the new design, all consumers with DG systems would gradually begin paying for grid usage starting in 2026, with the transition completed in 2029, when full wireline payments would be made. An alternative under discussion would maintain the incentives until 2030.
Today, Law No. 14.300 guarantees consumers who installed their systems up to 12 months after the publication of the standard – that is, until January 7, 2023 – the right to full compensation of energy credits until 2045.
Projects connected between January and July 2023 pay part of the network charges in a transition process that ends on December 31, 2030. For connections made after this period, the transition ends on December 31, 2028.
The Secretary of Economic Policies at the Ministry of Finance, Marcos Pinto, claims that the review seeks to correct distortions and eliminate subsidies considered inefficient.
"Today in Brazil, we have a series of subsidies in the electricity sector that no longer make sense. They distort the market and lead us down a dead end. Just like with income taxation, here we have the penthouse resident not paying condo fees, while others are left with a higher bill," said the secretary.
Pinto also stated that incentives for DG pose a risk to the sustainability of the electricity system. "It's an expensive form of energy, supported by subsidies that are no longer justified. In addition to the cost, the very functioning of the Brazilian electricity system is beginning to be compromised," he stated.
According to the report, the Treasury Department believes that bringing forward the charge would not affect the viability of investments already made, as the average amortization period for the systems is less than four years, with an estimated internal rate of return of 48% per year, according to data from 2024.
The solar energy sector, however, views such proposals as a breach of legal certainty. Representatives of the solar energy sector believe that any change to the transition rules violates acquired rights and could create uncertainty for investors.
In addition to the impact on small consumers and companies that invested in solar energy, associations warn that the reduction in incentives could slow the expansion of the segment, which currently accounts for more than 43 GW of installed capacity and is fundamental to the decentralization of the Brazilian electricity matrix.
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An answer
The most interesting thing is that this kind of pronouncement and empirical assertion is happening under this administration, within a flawed and outdated system where we pay for the B-wire and energy fees without proof of application, because the electrical system in Brazil is archaic. In other countries, as they love to say to support their actions, the system is much more modern and organized, like in ARUBA, for example. The island is powered almost ENTIRELY by wind and solar energy; in Brazil, we have abundant sunshine and pay a RED FLAG. Invest in energy storage; we're paying fees for it!