Regulatory Impacts on Innovative Energy Models: a Case Study on Subscription-Based Solar Energy Solutions in Brazil
Abstract
The Solar Energy Subscription model has emerged as an attractive solution for expanding access to renewable energy in Brazil, aligning with the country's goals of decarbonizing its energy matrix. Law No. 14,300/2022, regulated by Normative Resolution No. 1,059/2023, introduced notable advances for distributed microgeneration and minigeneration. However, it also presented challenges for certain business models due to the progressive implementation of B-Line tariffs. This study investigates the impact of this legislation on the financial viability of Shared Generation projects, using data from 36 electricity distribution utilities across the country. The results indicate that incremental B-Line tariffs have altered the national attractiveness scenario, particularly to the disadvantage of states with more extensive and less developed distribution networks, such as those in the North and Northeast regions. On average, Solar Energy Subscription projects experienced a 34% reduction in revenue. However, in regions with higher compensable tariffs, the model remains financially viable, as demonstrated by the competitive prices offered by certain distributors. The analysis highlights the relationship between B-Line tariffs and the total TUSD value as a key factor affecting compensable tariffs, ultimately reducing profitability and attractiveness. This situation restricts investment in renewable energy and limits access for consumers who are unable to install their own systems, either due to physical or financial constraints.
Keywords
Regulation, Renewables, Viability, Decentralization, Innovation, Brazilian Electricity Sector