Brazil Could Reach 2 GW Rooftop Solar By 2024 After Tax Is Dismissed
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Reported last week by various news agencies, the Brazilian government has ruled that local states no longer need to tax renewable power, which could allow the country to reach 2 GW of rooftop solar by 2024.
According to reports, Brazil’s government will lower profit participation contributions and social security taxes for solar equipment used by residential customers. Brazil’s Energy Minister Eduardo Braga announced the move on Wednesday of last week, adding that the country’s government will also ask states to reduce the goods flow tax on the energy generated by solar.
“The state of Sao Paulo endorsed our proposal and is leading a process that is a milestone for Brazilian solar generation,” Braga said in a speech to Congress. “Tax exemption will enable this source to be competitive,” though he apparently did not say how much the taxes might be reduced. The ICMS tax is said to average 20% to 30% of the value of renewable energy that homes and businesses return to the grid.
“The initiative is a positive sign to spur distributed generation in Brazil,” said Rodrigo Lopes Sauaia, executive director of the Brazilian Photovoltaic Solar Energy Association.
As for the possible threshold of 2 GW by 2024, figures from Bloomberg New Energy Finance calculate that approximately 700,000 homes and small businesses would have to install solar panels to reach the figure.
Solar power is already beginning to be a hope for the future in Brazil, with numerous solar power plants being initiated and funded over the past few months. A 350 MW floating solar plant was announced earlier in April, and a few days ago Minas Gerais, the south-eastern state of Brazil, announced that it will start the process to auction bids for the development of solar PV power plants.
Given Brazil is looking for a relatively small 2 GW by 2024, the market is obviously in its infancy, but with such hype surrounding solar in general, it is likely the country will see a continued rise in interest for solar reach out and affect rooftop solar.
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