Investment in photovoltaic panels returns in less than seven years - panels last more than 30 years; solution may reduce electricity bill up to 90%

The math is simple. Consider an investment payable in seven years that yields return for at least three decades and, on top of that, cuts a fixed monthly expense. It seems like a deceptive advertising or unattainable promise, but it’s real: replacing electrical grids with solar power ensures profitability and commitment to sustainability.

Carlos Viana, marketing and communication manager at Sebrae-CE (the Brazilian Micro and Small Business Support Service of Ceará state), vouches for photovoltaic technology. The edifice where the institution is based, in the state’s capital, Fortaleza, built more than 20 years ago, had to be revamped. “We managed to install a co-generation power system,” said Carlos. 

To reach the goal of generating power enough to supply 100% of lighting to the edifice, 210 photovoltaic panels were necessary. The complete installation generates 82 MWh and accounts for 15% of the entire power consumption of the building. “It’s an interesting decision in so many ways: I generate my own energy, so I don’t need to buy it from the concessionaire, it’s a clean source without transmission costs and it’s also an asset for the marketing of the company,” he asserted.

Solar power: learn the cost-benefit relation

At the time of the system installation, in 2014, Sebrae-CE team projected a calculation for the initial investment of BRL 450 thousand to be paid within six years and a half. Overall, the Brazilian Photovoltaic Solar Energy Association (Absolar) estimates seven years for the investment to yield 100% of return. According to data collected by the association, in the first month, reduction in electricity bill may go as low as 90% and panels have a 25-year lifespan working at maximum capacity. Henceforth, the capacity falls to 80% of the total for the next 25 years.

“It’s not an expensive technology, rates are competitive,” said Rodrigo Sauaia, executive president at Absolar (Brazilian Photovoltaic Solar Energy Association). ”From 2010 to date, photovoltaic solar energy cost has become 83% cheaper. Meanwhile, rates for the supply of electricity went above inflation. Today, generating renewable power is cheaper than buying it,” he completed.

Therefore, Sebrae-CE now recommends to many of the companies for which it provides consulting services to move to solar energy matrix. “Today, it’s about 30% cheaper and more efficient than the time we installed the system here (2014),” Carlos informed. “There are more financial institutions now with specific credit lines for generation of power, such as federal banks (Banco do Brasil and Caixa Econômica Federal) and Banco do Nordeste,” he added.

What is distributed micro and mini generation?

It dates back to April 2012 the normative resolution from the National Energy Agency (Aneel) that allows Brazilian consumers to generate their own energy from renewable sources and even supply the surplus to the local distribution grid. It means that the plant installed on the roof of your building or warehouse may even become a source of income.

This system is defined by Aneel as distributed micro and mini generation: being distributed micro generation the power plant with installed capacity up to 75 kilowatts (kW) and distributed mini generation with capacity above 75 kW and less than or equal to 5 MW.

Today, according to Absolar less than 1% of photovoltaic solar energy systems runs on batteries in Brazil.” The point, whether residential or commercial, is connected to the utility grid. When energy production is higher than consumption, this energy is introduced into the grid and goes to the community; when demand is higher than production, the energy available on this grid is used,” explained Rodrigo Sauaia, at Absolar. “Those supplying more than consuming will be awarded with energy credits – which can’t be exchanged with money,” he added.

Credits are valid for 60 months and can be used to deduct the consumption of units for the same holder in another location, provided that it’s in the service area of the same distributor. “The grid operates as a battery, storing the surplus until the moment that the consumer energy needs power from the distributor,” Aneel explained.

Overview of solar energy in Brazil

Photovoltaic solar energy ranks 6th among the key electric matrices in Brazil, considering its centralized installed capacity of only 2,103 MW – to complete that, there are more than 1,000 MW of distributed micro and mini generation. The installed capacity corresponds to 1.2% of the entire production in Brazil. Those leading the rank are hydroelectric power (63.7%), wind power (9.2%) biomass (9%), natural gas (8.1%), petroleum (5.4%) and coal (2%).

And the growth curve for renewable energy sources is increasing. This year, wind farm has become the second most important Brazilian matrix and investments for photovoltaic panel fields are in BRL 23 billion, contracted through auction up to 2023. In parallel with the increase of financial injection in the sector is the decrease in the average price of megawatt/hour. In 2013, the average price of 1 MWh was US$ 103, today the same 1 MWh costs, on average, US$ 17.60.

With investments, Absolar informed, Brazil sums 2.4 GW of installed capacity in the sector. This is enough to place Brazil in the world’s Top 10, but very far from leading countries. In 2018 alone, China invested tenfold of the entire installed capacity in Brazil: Today, the Chinese accrue capacity of 176 GW; United States, the runner-up, accrue 62 GW.

“Brazil needs competitive and fair industrial politics for the sector, reducing prices of components and equipment produced in the country, generating more jobs, technology and innovation,” recommended Absolar, in its annual report.

The Brazilian states of Bahia, Minas Gerais and Ceará lead, respectively, the installed capacity with centralized management. In regard to distributed micro and mini generation, Minas Gerais, Rio Grande do Sul and São Paulo come ahead.  

In Brazil, this scenario is still under development. Distributed generation grew 75% last year, to date 38 thousand generating units have been registered. However, advances in smart grids are needed, and bigger decision-making power for consumers, as well as the expansion of free market and implementation of response to demand,” analyzed Rui Altieri, president at Electric Energy Trading Chamber (CCEE) Board of Directors.

Content published in September 25, 2019

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