Comerc Solar Index measures return on solar projects in Brazil

The metropolitan region of Rio de Janeiro leads in the residential segment; Manaus has the best return for small scale industries and retail

Greater Rio de Janeiro (capital not included) and Manaus now concentrate the best returns for investment in solar energy in Brazil, according to the Comerc Solar Index. According to the study, a residential project in the metropolitan region of Rio de Janeiro gets paid back in 2.7 years, while the payback period for investments made in retail and small-scale industries in Manaus is 4.5 years.

“It’s interesting to note that payback time shrunk by almost half a year, both for residential and commercial/industrial projects,” says Comerc ESCO Director Marcel Haratz.

What the executive found especially impressive is how investment in solar energy became more competitive across the country. “Last year, the worst payback values were 12 years in Medium Voltage and 7 years in Low Voltage. These figures fell to 7.58 years (industry and retail) and 5.3 (residential)”, he says.

Low voltage: residential projects

Solar energy has become significantly more competitive in residential projects since last year. A total of five regions had better returns than Teresina – the city led the Comerc Solar Index in early 2018 with a payback period of 3.14 years. Grande Rio de Janeiro, Teresina, Manaus, Belém and João Pessoa have beaten that mark this year.

The negative highlight is the capital of the state of Pernambuco:
Recife fell 17 positions, going from 4th to 21st in the Comerc Solar Index while maintaining practically the same return. “This is due to the greater competitiveness of the solar energy market. Solar energy gained scale in several other capitals, such as João Pessoa, up seven positions, or Maceió, eight positions higher, and Porto Alegre, which advanced five positions while still in the intermediate group on a national basis”, says Haratz.

Medium Voltage – Retail and Small-Scale Industries

 While in the 2018 Comerc Index Manaus had almost a year of payback advantage over the second place (Rio de Janeiro), this year competitors are closing in: the capital of the state of Amazonas remains at the top with 4.53 years, but it is now followed closely by Goiânia (4.59) and Greater Rio de Janeiro (4.66).

Positive highlights were Teresina, which climbed 13 positions, from a payback period of 7.82 to 5.01 years, and São Luiz, which advanced eight positions (8.56 years in 2018 vs. 6.06 this year). In contrast, Campo Grande dropped from 9th to 22nd (n spite of the practically stable return on investment); Aracaju fell from 13th to 23rd (even with 6 months’ shorter payback) and Recife, 8th in 2018 and now 18th in the updated index (with slight improvement of 0.3% in payback period).

The Solar Comerc Index: methodology

The payback period of a solar energy project is a snapshot of the current Brazilian scenario based on the analysis made by the Comerc ESCO team. The study considers:

  • Current tariffs: Class B3 for Low Voltage and Class A4 for Medium Voltage;
  • Calculation of payback considers average investment values and costs avoided through the use of the photovoltaic system for each utility company;
  • The system’s power output is estimated under ideal installation conditions, such as slope angle, orientation and absence of shading.

Any changes in tariffs charged will directly impact the results found in the Index.

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