Prices in Brazil's next solar auction may be roughly 30% higher - report

Solar panels. Featured Image: foxbat/Shutterstock.com

March 17 (SeeNews) - Brazil's solar-only reserve energy auction in August is expected to bring about 30% higher bidding prices when compared to these in October 2014, said news portal Canal Energia, citing an industry expert.

The forecast is mainly based on the US dollar's appreciation. Also, the interest rates for loans from the Brazilian National Social and Economic Development Bank (BNDES) are now higher and there has been 2.5-percentage-point raise in certain import taxes.

The solar sector in Brazil is directly impacted by the exchange rate. Currently, the main challenge for the solar industry is the Brazilian macroeconomic environment, said the CEO of the Brazilian Association of Solar Photovoltaic Energy (ABSOLAR), Rodrigo Sauaia, as quoted by Canal Energia.

Sauaia added that ABSOLAR is fighting to see the Brazilian solar sector get the conditions that wind power already has, such as the permanent exemption of solar power equipment from the federal tax for industrialised products (IPI). He was further cited as saying that another measure to lower the solar bidding prices would be extending the reserve energy contract to 25 years from the current 20.

At the end of October 2014, project developers won contracts for 889.7 MW of solar capacity in the previous government auction. The lowest bidding price for solar power reached BRL 200.8 (USD 61.5/EUR 58) per MWh. Back then, Bloomberg New Energy Finance (BNEF) said that even the average electricity sale price in the auction, BRL 215/MWh, is among the lowest ever recorded for solar power.

According to Canal Energia's report, the economic scenario could also affect the wind sector.

(BRL 10 = USD 3.055/EUR 2.873)

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Lucas is based in Brazil. He joined Renewables Now to expand coverage of the Ibero-American market, a highly attractive destination for green energy investment.

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