With the collaboration of Enio Fonseca
Initial considerations
In present-day Brazil, if you walk through practically any Brazilian city, whether in urban areas or even in the countryside, you will see that it is not difficult to come across solar panels on the roofs of houses, buildings, commercial establishments, or even in large solar farms or on land by the side of roads and in the middle of rural plantations.
The rapid growth of solar power generation has propelled Brazil to the milestone of 60 GW of installed capacity, making it the second largest source in the national electricity matrix, representing approximately 24,5% of the total. Today, the country has more than 4 million photovoltaic solar systems installed on rooftops, commercial buildings, and power plants.
Solar energy has expanded by about 70% per year, drastically changing the generation profile in the SIN (National Interconnected System):
- 2021 to 2023: The leap was dizzying. From an incipient share, solar power came to account for significant portions of the country's instantaneous energy.
- 2023: Produced 50.633 GWh.
- 2024: Production reached 70.996 GWh, with almost 58% coming from micro and mini-distributed generation.
- 2025/2026: Following the increase in capacity, the consolidated annual production of solar energy continued its strong expansion, surpassing the 80.000 GWh mark.
O tree Distributed micro and mini-generation (MMGD) has transformed the urban and rural landscape of the country, being considered by many as a victory for the energy transition and the consumer's right to choose. However, the behind-the-scenes aspects of this growth reveal a worrying side effect that the specialized press has begun to expose: the rise of so-called "solar energy theft."
The term refers to the illegal practice of expanding the generation capacity of photovoltaic systems — either by adding more panels or installing more powerful inverters — without proper approval and notification to the local distributor or the granting authority.
What was once seen as an isolated commercial infraction has transformed into a systemic risk, forcing the state and regulatory agencies to intervene to prevent a collapse in the management of the national electricity system.
The technical and economic impact: The "Duck Curve" and the R$16 Billion bill.
This accelerated expansion brings great benefits, but it poses complex challenges to the ONS (National System Operator), a situation that is aggravated by solar generation without centralized control by the granting authority.
- Stopped on the network (CurtailmentSince solar energy is intermittent and its peak production occurs during the day (when demand is usually lower), the excess of clean energy generation in certain regions has exceeded the capacity of transmission lines. This forces the ONS (National System Operator) to carry out operational cuts, generating losses of billions of dollars in unused energy.
- Safety and Load Ramp: The abrupt drop in solar generation in the late afternoon requires the system to quickly dispatch thermal or hydroelectric power plants to compensate for the loss of sunlight and meet peak nighttime consumption.
This is the phenomenon known globally as the "Duck Curve." During peak solar radiation, around midday, there is a massive oversupply of energy injected into the grid. However, as soon as the sun sets, solar generation plummets abruptly, coinciding exactly with the time when consumer consumption skyrockets, in the early evening.
To cover this sudden gap in the energy matrix, the system is forced to activate fast-response thermal power plants, which are significantly more expensive and polluting. When solar systems are expanded clandestinely, the ONS (National System Operator) loses visibility into the behavior of the actual load, and ends up operating in the dark.
Beyond the technical bottleneck, there is a significant financial impact of a distributive nature. The tariff discounts and incentives granted over the years to MMGD owners have generated an estimated cost of R$ 16 billion.
This amount is distributed through the CDE (Energy Development Account) charge, which directly increases the electricity bill for conventional consumers who cannot afford to install solar panels, creating a socially unequal cross-subsidy scenario.
The regulatory reaction: Public Consultation No. 009/2026 of ANEEL
Given the seriousness of the situation, the ANEEL (The National Electric Energy Agency) has taken drastic measures to curb what experts call a culture of transgression. Under the reporting of director Gentil Nogueira de Sá Júnior and based on Technical Note No. 148/2025-STD, the agency opened Public Consultation No. 009/2026, with a deadline for receiving contributions set for June 6, 2026.
The proposal profoundly alters the rules of the game and focuses on rigorously combating illegal expansions through four main pillars. The first of these is the empowerment of distributors, who will now act firmly as DSOs (Distribution System Operators), receiving support for broad oversight and technological monitoring of the network.
The second pillar establishes strict penalties, authorizing the immediate suspension of energy supply and injection if any unauthorized increase in power is detected. Thirdly, the text provides for the possibility of connection denial, giving distributors a legal basis to refuse new access requests in areas where the technical stability and security of the local network are already compromised.
Finally, the proposal includes a review of surplus energy, altering the method of compensation for injected energy to discourage oversupply that is harmful to the system during off-peak hours.
The current legal framework
Although the new penalties are on the verge of becoming stricter, Brazilian legislation already classifies the practice as irregular. Currently, the sector is governed primarily by two legal pillars.
Law No. 14.300/2022, known as the Legal Framework for Distributed Generation, established the transition rules for charging for the use of distribution infrastructure (the so-called "Wire B"), defining the rights and duties of micro and mini-generators.
Complementing the law, the **Normative Resolution** ANEEL Decree No. 1.000/2021 dictates the general rule for the sector. Article 8 explicitly states that any change that implies an increase in injected power requires prior approval from the distributor. Failure to comply with this step constitutes a breach of contract and tariff fraud.
Geography of solar energy: a territorial overview of the Brazilian market.
The Brazilian solar energy market has surpassed the historic mark of 43 GW (Gigawatts) of installed capacity in micro and mini-distributed generation, driven by more than R$ 140 billion in accumulated investments. However, the characteristics of the producers and the challenges generated by clandestine connections paint very different scenarios in each region of the country.
In the Southeast region, which holds the absolute leadership in connections and installed capacity, the market is strongly driven by São Paulo and Minas Gerais, the latter being a historical pioneer in tax incentives for the sector. It is in this part of the country that urban network bottlenecks manifest themselves most intensely and where the largest volume of fraud in residences and medium-sized businesses is concentrated.
The Northeast region stands out for having the highest capacity factor in the country, a reflection of its excellent solar irradiance levels. In addition to a strong presence of distributed generation, the region is a hub for centralized generation, home to large solar parks.
This high injection of energy generates a reverse logistical challenge, creating enormous pressure on the transmission lines that connect the Northeast to the rest of the National Interconnected System.
In the Southern Region, solar energy penetration is characterized by medium-sized systems geared towards agribusiness and rural cooperatives, with a strong presence in Paraná and Rio Grande do Sul. In these locations, expansions carried out without the authorization of distributors directly affect the stability of rural circuits which, due to their long-distance technical characteristics, are traditionally more sensitive to voltage fluctuations.
The Central-West Region is experiencing rapid growth focused on large-scale mini-plants that supply large agricultural properties and industries in states such as Mato Grosso and Goiás.
The Midwest has become a major focus of attention for regulatory agencies precisely because of the scale of illegal expansions, often specifically designed to inflate the profit margins of large investors.
Finally, the Northern Region holds the smallest share of the national market due to logistical and demographic complexities. Despite this, photovoltaic energy has grown strategically in the region, consolidating itself as a crucial economic alternative to replace isolated diesel-powered systems in the interior of the Amazon.
Conclusion: the need for the sector to mature.
The solar energy market in Brazil experienced a fascinating "gold rush," but one that operated on the edge of regulatory and technical sustainability. While many residential consumers carry out expansions without knowing they are committing an infraction, often misled by unscrupulous installation companies, the most alarming scenario involves corporate investors who deliberately ignore the rules to maximize their financial gains.
The expansion of micro and mini-distributed generation represents one of the most significant structural transformations in the Brazilian electricity sector in recent decades, establishing itself as a legitimate instrument for energy transition, decentralization of the energy matrix, and democratization of access to energy.
However, the consolidation of this new paradigm cannot occur outside the legal, regulatory, and constitutional order that underpins the National Electricity System.
The practice of illegally expanding photovoltaic systems, the so-called "solar theft," transcends the realm of mere contractual or administrative irregularity, reaching a sensitive constitutional and institutional dimension.
This is because such conduct directly affects the structuring principles of Public Administration and economic regulation foreseen in article 37 of the Federal Constitution, especially the duties of legality, efficiency, administrative morality and legal certainty, in addition to compromising the operational stability of an essential public service subject to a regime of collective interest.
From a constitutional-economic standpoint, the uncontrolled expansion of distributed generation without regard to technical and authorization rules also undermines the foundations of Article 170 of the Constitution, insofar as free enterprise and economic freedom are not absolute and must coexist with the regulatory function of the State, consumer protection, the reduction of inequalities, and the preservation of competitive and tariff balance in the electricity sector.
the performance of ANEELBy promoting Public Consultation No. 009/2026 and strengthening mechanisms for oversight, monitoring, and accountability, the State proves to be legally legitimate and constitutionally necessary, especially given its duty to guarantee the continuity, reliability, and affordability of public electricity services, as stipulated in Article 175 of the Federal Constitution.
The regulatory power exercised by the Agency does not constitute an arbitrary restriction on the expansion of solar energy, but a concrete expression of the principle of regulatory proportionality, which is essential to harmonize technological innovation, systemic security, and tariff fairness.
From this perspective, the future of distributed generation in Brazil will depend on the institutional capacity to balance energy expansion with robust regulatory governance.
The maturation of the sector will require not only greater regulatory rigor, but also regulatory predictability, regulatory intelligence, technological traceability, and a strengthening of the energy compliance culture on the part of consumers, integrators, investors, and sector agents.
Brazil's energy transition will only be sustainable if it is anchored in solid constitutional foundations capable of simultaneously ensuring innovation, systemic stability, legal certainty, and social equity. After all, in a structuring sector like electricity, the preservation of the public interest and the reliability of the grid must prevail as the central vector of all regulatory action.
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.
