In recent years, the solar energy market has undergone a significant transformation, driven by factors such as technological advancement, increased global production capacity and changes in the economic scenario.
The significant drop in the prices of photovoltaic s over the last two years has been one of the most notable aspects of this process, but the recent rise in import taxes and exchange rate volatility brought new challenges for integrators and consumers.
Given this dynamic scenario, understanding market movements has become essential for those working in the sector.
Data obtained by Canal Solar in partnership with Soleasy, a company specialized in solutions for the solar sector, reinforce this trend.
According to the Radar Solfácil platform, the average cost of a solar energy system in Brazil fell from R$4,80/W to R$2,40/W between the first quarter of 2022 and the fourth quarter of 2024.
To discuss these trends and better understand the factors that explain this significant reduction in costs, the Canal Solar interviewed Fabio Carrara, CEO of Solfácil.
During the conversation, the specialist provided a detailed overview of the impacts of China's production overcapacity, price variations over the last few years and the outlook for the solar market in Brazil.
He highlighted how Chinese overproduction has led to a price war, drastically reducing manufacturers' margins and putting pressure on integrators to adapt to cost swings.
In addition, he addressed the challenges posed by high interest rates and the effect of energy tariffs on the pricing of systems in different regions of the country. Another relevant point discussed in the interview was the growth of the energy storage market.
Carrara explained that factors such as the reduction in the value of energy credits injected into the grid, the recent blackouts in some regions of Brazil and the inversion of power flow have driven the search for solutions with batteries.
Check out the full interview below:
In of price, when we talk about solar energy, what can we highlight about the evolution of costs over the last few years?
Naturally, with this overcapacity in production, many companies ended up with high inventories and not enough demand to sell. This led to a price war and margin compression.
Over the past two years, we have seen a substantial drop in the prices of photovoltaic s. This dynamic has also impacted manufacturers, who have suffered significant losses due to this excess supply.
So, did this result in a significant drop in prices?
Yes, at the peak of prices, s were about 70% more expensive than they are today. However, this downward trend was not directly reflected in the services provided by integrators. The price of labor, for example, did not suffer the same deflation.
Often, when we talk about falling prices, we associate this with technological advances and gains in scale in production. But there is also the factor of China's overcapacity, right?
Yes. Technological evolution exists and has its impact, but in the recent context, this factor has been of little relevance in the face of excess production. In recent years, China has increased its production capacity far beyond global demand.
This has forced manufacturers to reduce their margins to keep factories operating, to the point where some are operating with virtually negative margins.
Faced with this overproduction, how are manufacturers reacting now? Do you have any information about this dynamic?
Correcting this mismatch between production capacity and global demand will take years. What we are seeing now is a gradual adjustment, with the Chinese government itself intervening to prevent further unbridled expansion. But this balance is still far from being achieved.
And how can this impact prices?
If there were a more balanced demand, prices would be a little higher. But at the same time, technology continues to evolve, allowing for modules with greater power and efficiency, which also influences prices.
Another factor that can affect prices are local variables, such as taxes and exchange rates. How do you see this?
It is difficult to make predictions as the market can be affected by political and economic decisions. For example, at the end of last year, we had an increase in the import tax on solar s, which rose from 9,6% to 25%.
This type of change can directly impact prices. In addition, exchange rate fluctuations also play a relevant role.
With the rise in module prices, what is the situation for integrators?
In the short term, when there is a sudden increase in the price of equipment, the integrators are the ones who initially absorb this impact.
This happens because they have already signed contracts with previously agreed values and cannot simply the increase on to the end customer.
But, as stocks are renewed, projects begin to be repriced, and this variation ends up reaching the consumer.
Despite this, is financing the systems still viable?
Yes. Interestingly, even with the rise in interest rates, today the financing installment for a photovoltaic system is lower than it was a year ago. This is because the drop in equipment prices partially offset the effect of high interest rates.
The price of solar systems varies from state to state in Brazil. What explains these differences?
Basically, there are two main factors. The first is market competitiveness: in states where there are more integrators competing for the same customers, prices tend to be lower.
The second factor is the cost of the energy tariff. In places where the electricity bill is more expensive, solar projects tend to have a higher price, as the savings generated by the system make more sense for the consumer.
The industry has been talking a lot about batteries in recent months. What are the main factors driving this market?
There are four main factors that are encouraging the use of batteries in Brazil. First, Law 14.300/2022, which reduced the value of credits for energy injected into the grid, making storage more attractive.
According to recent blackouts and power outages, which have increased consumer concerns about energy security.
Third, the issue of power flow reversal, which has made it difficult to connect new solar systems in some regions.
And finally, the drop in the price of batteries, making this technology more accessible.
So can we expect energy storage to gain traction in the coming years?
Yes. There are some innovative projects emerging, and we see a movement similar to what happened with solar energy a few years ago.
Integrators need to prepare for this new demand, as selling storage systems requires more technical knowledge and a more consultative profile.
Finally, what is your vision for the solar sector in the coming years?
The solar energy market still has a lot of room to grow. In addition to photovoltaic generation, energy storage will be one of the next big movements in the sector.
Integrators who update themselves and know how to offer complete solutions, including batteries, will have a great opportunity ahead of them.
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