Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249912 
Year of Publication: 
2022
Series/Report no.: 
IES Working Paper No. 2/2022
Publisher: 
Charles University in Prague, Institute of Economic Studies (IES), Prague
Abstract: 
The Brazilian National Electrical Agency (ANEEL) proposed in 2019 that the costs for accessing the electricity grid should be shared among all consumers. This would do away with cross-subsidies where normal consumers without installed solar distributed generation (DG) units effectively cover the costs of access to the grid for consumers with DG units. We compared the viability of two scenarios, one before and the other after the proposed changes, to understand how this legislature will affect the viability of DG projects in Brazil. We did this by studying all 5 regions covering the whole Brazilian area by analyzing data on average solar radiation, demand, and energy prices. We conducted stochastic analysis by varying the investment costs, demand, and energy prices, for DG solar plants. Lastly, we conducted scholastic analysis for the national scenario by varying the Discount Rate (DR). We confirmed that there is a statically significant reduction in economic viability for DG solar units in Brazil if the proposed legislation were to be enacted, while the payback period and other financial indicators differ across regions. We confirmed that solar radiation is not the only decisive factor in determination of economic viability of DG solar production.
Subjects: 
Distributed Generation
Regulation Policy
Cross-subsidies
Micro-Power Plants
Economic Feasibility Analysis
Solar Photovoltaic Energy
JEL: 
Q41
Q48
Document Type: 
Working Paper

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