EN 
PT_BR 
Recently, the state of São Paulo granted ICMS exemption for micro and mini generators of electrical energy and other modalities of DG (distributed generation) in energy compensation up to December 31, 2024.
It is important to highlight that, according to the Decree No. 67,521/2023, the exemption applies only to the compensation of electrical energy produced by microgeneration and minigeneration of up to 5 MW for photovoltaic projects and 1 MW for other sources.
The published decree also determines that those who consumers responsible for a consumer unit with microgeneration or distributed minigeneration of photovoltaic solar energy that falls into one of the following categories:
- Consumer unit that is part of an enterprise with multiple consumer units;
- Consumer unit characterized as shared generation;
- Consumer unit characterized as remote self-consumption.
In an interview with Solar Channel, state deputy Castello Branco, who defends tax reform and tax reduction in the state of São Paulo, stated that the publication of this decree is the result of around four years of work in the Alesp (Legislative Assembly of the State of São Paulo).
The parliamentarian is one of those responsible for articulating the proposed text for exemption from ICMS on consumer energy credits, via decree.
Also according to the deputy, during discussions on the topic the Free Solar Movement was very active and contributed to the matter. The parliamentarian also highlighted that he was part of the infrastructure commission for the state of São Paulo, which takes care of water, electricity, telephone, internet and electricity concessionaires.
“In this infrastructure committee, we addressed this issue, and the committee gave favorable approval to the bill. I gave good oral arguments, in a very academic, very technical and very scientific way, showing that this tax charge was not appropriate, because sustainable, clean energy, photovoltaic solar energy, is the future and it would only help the country to grow, if it had radical tax exemption”, commented Castello Branco.
“So, it’s a big victory. A victory for me, as a deputy, a victory for the other deputies who supported us and voted in favor. Ultimately, a victory for society, because they will have the right to use self-produced photovoltaic electrical energy without paying high taxes.”
The parliamentarian added that with the publication of the decree, São Paulo will consolidate its leading role in the solar energy market.
“Now, a gigantic business opportunity is opening up, because everyone will want cheap electricity. Especially because the concessionaires that currently operate in the state provide expensive energy, with major interruption problems and serious technical problems, depending on the region of the state”, he concluded.
And what does it look like in practice?
Lawyer Einar Tribuci, a specialist in tax law, explains the impact on consumers who invested in solar distributed micro and mini generation. According to him, the tax exemption is in the TE (Energy Tariff).
“In practice, nothing changes for systems of up to 1 MW in self-consumption mode as they were already covered by Agreement 16/2015. But it changes in relation to power between 1 MW and 5 MW and also changes to other modalities of shared generation and EMUC (Enterprise with Multiple Consumer Units), as these two modalities were not foreseen in Agreement 16/2015 and, therefore, it becomes be an exception through an exemption in the state of São Paulo”, he explains.
“Finally, this improves for projects that are already installed in the shared generation modality in the state of São Paulo and for those models that exceed 1 MW. For new projects, the impact is smaller, as this exemption is only valid until 2024 and it takes a long time to build and implement a plant”, concluded Tribuci.
