MG exempts ICMS on imports of solar energy generation equipment

Occupying the first position in the national ranking of installed power in solar DG (distributed generation), with 1,3 GW — 18% of national photovoltaic energy production —, the solar market in Minas Gerais is expected to heat up even more. 

This is because Decree No. 48.296/2021 was published last week, granting exemption from ICMS (Tax on Circulation of Goods and Services) on import operations of equipment and components for the generation of solar and wind energy. 

According to the government of Minas Gerais, the measure mainly aims to guarantee projects installed in Minas Gerais territory access to good component suppliers, in addition to those that already exist in the state, improving competitiveness in this market.

Gustavo Pontello, Investment Promotion analyst at Minas Gerais Investment and Foreign Trade Promotion Agency, highlights that the change comes to meet requests from the sector, as the legislation did not cover import operations, but only internal and interstate operations.

He also assesses that the change will attract more investment in renewable projects in the state. “There are projects that can use hundreds of thousands or millions of solar panels, which require a number of components that the domestic market is often unable to deliver. The decree was received with great enthusiasm by the sector. People are very interested in investing in solar and wind energy generation in Minas and will certainly consolidate these interests after the measure,” he says.

The news was well received by Bruno Catta Preta, commercial director of Genyx Solar and coordinator of ABSOLAR (Brazilian Association of Photovoltaic Solar Energy) in Minas Gerais. “The publication of the decree reinforces the commitment of the government of Minas Gerais to continue encouraging solar energy in the state. I often say that Minas Gerais is the driving force behind solar energy in Brazil and now, with the publication of the decree that clarified the rules, it will certainly help to further boost the development of the solar sector, which generates quality jobs in several areas,” he comments.

“The legislation did not clearly define that the equipment was exempt, which created a lot of insecurity for those involved. In Minas, companies interested in developing their activities linked to solar energy find a very attractive environment, as we have an excellent solarimetric index, large availability of land, we have equipment distributors, input manufacturers and companies specialized in installations. In short, a complete range of options”, he adds.

For lawyer Marina Meyer, the decision comes to simplify and strengthen the segment in the state. “In short, the new text establishes that the exit or entry of equipment or components intended for the use of solar and wind energy will not be taxed by ICMS”, she explains.

“It is worth highlighting that the exemption promoted through State Decree No. 48.296/2021 is the result of great pressure exerted by the Minas Gerais distributed generation market, given that the legislation did not clearly define which equipment and/or components counted, or not with the ICMS exemption, which implied significant legal uncertainty for entrepreneurs”, he adds.

Lawyer Marcelo Tanos Naves, specialist in Regulatory Law and Energy Law, lists the factors that motivated the state to make the exemption decision. “State Decree No. 48.296/2021 is also the result of the State of Minas Gerais's manifest interest in propagating distributed generation on Minas Gerais soil, reinforcing the State's national leadership in photovoltaic energy generation and attracting more investments for this type of generation of electrical energy”, he highlights.