Doing Business in Brazil
By Fernando Pieri | Photo: Fernando Pieri, lawyer and Consultant at HLL
Following the trend of numerous countries concerned with sustainable development as well as environmental protection, Brazil has been moving to strengthen the implementation of new methods of producing clean energy in the national territory. Public policy prepared by the central government in recent years has supported an upward trend in the use of renewable energies, especially solar energy.
Various studies have shown that the demand for energy increases much more than the production capacity of the companies. The generation of fossil energy, as it is known, is limited and highly polluting. Thus, it is imperative to find ways of producing clean energy as it needs to be increasingly strengthened.
Favorable rules to energy production
On April 17, 2012, Brazilian Electricity Regulatory Agency – ANEEL – has approved a normative resolution establishing rules for the production of energy by micro generation plants, connected to the of electric power distribution system. The energy put into the distribution system will be offset by credits for energy use.
This means that any private individual or legal entity will be able to install, in homes or establishments, a power generator themselves which will generate the energy they need. In addition to that, it will allow the transfer of surplus power to the distributors.
Solar Energy in rising
Moreover, ANEEL has also brought a number of incentives for enterprises producing and marketing energy originating from solar energy. This will reduce in an 80% discount in the rates of use of public electric systems and distribution.
Hence, an enormous market is opening to the producers and service providers related to the materials needed for mounting solar power generators in the country.
The residential market and the micro and small businesses are interested in setting up their own solar power generating systems. This would generate a reduction in costs and the possibility of gains in the medium term, after the functioning of the power producer modules and the receipt of credits from compensation for the excess of energy transferred to the distributors.
What flags this focus centered on clean energy is precisely the requirement demanded by one of the largest investment programs of the federal government (Growth Acceleration Program – PAC). It means that, on households and residences built by the program, it is mandatory that the entire water heating system be done using solar energy.
World Cup 2014: stadiums operate on solar energy
Another interesting move of the Brazilian leaders in this regard is the requirement for installation of solar power plants on the roofs of the stadiums hosting the games during the World Cup 2014. Thus, we notice how Brazil has set solar energy as its first and foremost way to use these new less polluting technologies for energy production.
It opens up a huge market for investors interested in building solar energy farms to work in energy production and trading. Companies that hold the knowledge in producing, assembly and installation, besides the provision of maintenance of these systems have huge opportunities of success in this market, which is still emerging in Brazil.
Opportunity for investment in clean energy
The federal government offers incentives for their entry into the market of solar photovoltaic (PV) energy. Several lines of credit to finance projects for renewable energy production are among them. Added to this are the incentives brought by the “Lei do Bem” (Law of Goods) for companies that invest in the development of technological innovations, which may also benefit investors wishing to enter the market that produces clean energy technology in Brazil.
Based on this combination of incentives, it paves the way for the implementation of renewable energy, especially solar, Brazil takes its first step to establish itself as a producer of solar energy. It could even challenge one of the top positions in the ranking of solar energy producers. The productive potential is enormous. There is a lot of available land and high levels of incidence of sunlight during most of the year.
Therefore, there are many advantages for the Canadian investor who aims to enter the solar energy market in Brazil. In addition to investing in one of the largest economies in the world, a stakeholder will have tax incentives, credit facilities provided by the government or foreign institutions aimed at developing sustainable energy, and a growing market with a high probability of success. Opportunities await, the doors are open and you are invited.
Fernando Pieri Leonardo, lawyer and consultant with 16 years experience, is a partner at HLL Lawyers, specialising in International Trade, Customs Law, Tax and Business.
Contact: email@example.com Website: www.hll.com.br