The newest project from world-leadingsolarmodule maker Yingli Green Energy is a 1-megawatt installation at Brazil's Arena Pernambuco soccer stadium, the site of five upcoming 2014 FIFA World Cup matches.
Built by Brazilian solar pioneer Grupo Neoenergia, the net-metered system is in the solar-supportive state of Pernambuco’s capital, Recife. The 3,650 monocrystalline panels will generate more than 1,500 megawatt-hours of electricity annually. Power not consumed by the stadium will go to the local community.
Brazil’s solar market is “just taking off,” according to Adam James, GTM Research Solar Analyst for Global Demand. James is readying the 2Q 2014 update of GTM Research’s Latin America PV Playbook, which projects that Brazil’s 2013 installed capacity of 38.6 megawatts will nearly double to 72.6 megawatts this year.
“But unlike many of the other leading Latin American solar markets such as Mexico and Chile,” James said, “there appears to be no ceiling on Brazil’s potential growth over the long term. Companies like Yingli can think not just in terms of what they can do over the next five years, but what they can do over the next ten, twenty, or 30 years.”
The Latin American solar market does not represent a large percentage of Yingli’s global market share, said International Sales VP Jeff Barnett, “but it is the fastest-growing segment.”
Yingli’s conservative internal figures, which are “a triangulation of announced numbers and estimates, a lot of science and a little art,” Barnett said, show it leading the Brazil market “with north of 30 percent of all modules shipped.”
As part of Yingli’s move to build a brand in Brazil’s emerging market, it joined international icons like McDonald's, Coca-Cola, Budweiser, Visa, and Sony as a sponsor of the 2014 FIFA World Cup.
“The goal is to become a household name,” explained Marketing VP Helena Kimball. Few Chinese brands have managed it, but “as solar PV becomes a common home improvement and consumers become more educated,” she said, “solar equipment brand names will matter.”
Source: GTM Research’s Latin America PV Playbook
Yingli is also forming partnerships in Brazil. To sustain its position as “the world’s leading solar module supplier,” Barnett said, it brings its finance partners together with its developer partners.
The solar community in Brazil is still “just one busload of people making solar happen,” Brazil Manager Markus Vlasits said with a laugh. “The Pernambuco auction was a pioneering advance.”
Solar was entirely excluded from last year’s federal energy contract auction because it could not compete with Brazil’s cheap and usually abundant hydroelectric resource. But in Pernambuco, “they recognized that solar complements hydro,” James said. Utility-scale solar projects were awarded 122.8 megawatts' worth of twenty-year power purchase agreements.
Brazil’s recent drought forced the government to provide a $1.7 billion bailout of the energy sector to cover the costs of thermal backup generation. That cost will be passed on to consumers. Other states are now thinking about instituting auctions like Pernambuco’s, and there is talk of a solar-only federal auction, James said, because “they are realizing there are reasons other than bottom-line capital costs to think about with solar.”
The top five developers in the Pernambuco auction were Sowitec, Sun Premier Holding, Kroma, Cone Concierge, and Enel Green Power. Yingli is in talks with all of them, as well as with many smaller local developers, said Vlasits.
Source: GTM Research’s Latin America PV Playbook
On the distributed generation side, Brazil’s government took an important step forward with Resolution 482, the net metering law implemented in January 2013 for renewable energy systems up to 1 megawatt.
“It was a good thing and the right thing for the government to do,” Vlasits said. “But there is definitely room for improvement.”
Two areas need strengthening, according to Vlasits. First, the approval process for interconnection can take two to three months. Vlasits believes Brazil’s utilities will improve this as they become more familiar with DG.
Second, taxes on electricity consumed and electricity exported to the grid prevent solar owners from zeroing out their utility bills, which, Vlasits said, was the original intent of Resolution 482. That needs to be corrected, in his view. Some states have done it, but others haven’t. “Instituting net metering was important. Now politicians need to improve it.”
Brazil is going through an energy crisis, according to Vlasits. The dry summer has left hydro reservoirs at 20 percent to 30 percent of capacity. But electricity demand from a burgeoning middle class is going to grow, and leaders know they will have to increase and diversify the energy mix.
“The country is spending huge amounts of money to subsidize thermal energy, and yet we are still close to blackouts,” Vlasits said. “PV offers a tremendous value proposition. It is competitive in the spot electricity market, a solar installation can be completed much faster than any other new resource facility, and Brazil has to do something.”