Developing Brazil’s Market for Distributed Solar Generation

This research paper analyzes the determinants of distributed solar photovoltaic (PV) generation penetration across 5,563 municipalities in Brazil. The study finds that demand-side factors—specifically population, GDP, and electricity tariffs—are more significant predictors of PV adoption than the availability of solar resources. The authors argue that current tariff subsidies in high-potential regions like the Northeast may be hindering PV growth and suggest that climate mitigation policies must address demand-side frictions to be effective.

• Demand-side factors such as population, GDP, and electricity tariffs are the primary determinants of distributed solar PV penetration in Brazil, outweighing the influence of solar radiation.
• There is a negative correlation between solar radiation and the number of PV units at a national level, meaning municipalities with lower annual solar radiation often have more distributed solar PV generation on average.
• Solar radiation only becomes a positive predictor of PV adoption when the analysis is restricted to municipalities within the same electricity provider's concession area, which controls for the specific commercial and incentive policies of those distributors.
• Electricity tariffs in Brazil's Northeast region are kept artificially low due to sector subsidy policies, which reduces the economic incentive for consumers to invest in distributed solar generation despite the region's high solar potential.
• As of June 30, 2017, distributed solar PV penetration in Brazil remained very low, with consumer units generating electricity representing only 0.014% of total consumers in the country.
• The study concludes that estimates of the potential for renewable energy to mitigate climate change may be upwardly biased if they rely solely on natural resource availability and ignore demand-side factors.

APA

Assunção, J., & Schutze, A. (2017). Developing Brazil’s Market for Distributed Solar Generation. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2017/10/Working_Paper_-_Distributed_Solar_Photovoltaic_Generation_in_Brazil.pdf

Chicago

Assunção, Juliano, and Amanda Schutze. Developing Brazil’s Market for Distributed Solar Generation. Climate Policy Initiative, 2017. https://www.climatepolicyinitiative.org/wp-content/uploads/2017/10/Working_Paper_-_Distributed_Solar_Photovoltaic_Generation_in_Brazil.pdf.

Wikipedia

{{cite report |last1=Assunção |first1=Juliano |last2=Schutze |first2=Amanda |title=Developing Brazil’s Market for Distributed Solar Generation |publisher=Climate Policy Initiative |date=September 2017 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2017/10/Working_Paper_-_Distributed_Solar_Photovoltaic_Generation_in_Brazil.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{assuno2017developing, author = {Assunção, Juliano and Schutze, Amanda}, title = {{Developing Brazil’s Market for Distributed Solar Generation}}, institution = {Climate Policy Initiative}, year = {2017}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2017/10/Working_Paper_-_Distributed_Solar_Photovoltaic_Generation_in_Brazil.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }