Climate action that pays

When Johannes Kissel began working as a renewable energy consultant for GIZ in Brazil, only 250 households across the country were equipped to supply themselves with solar energy. That was in 2009. There was no economic basis for solar power in Brazil, even though the country receives much higher levels of sunlight than Germany. Today, that sunshine benefits around 6.7 million households. This transformation was triggered in part by a German Development Ministry (BMZ) project, in which a football stadium played a major part. 

Latin America’s first solar stadium was Pituaçu in Salvador de Bahia, the country’s third largest city. But what set it apart was the exemption granted by the regulatory authority that made the generation of electricity using roof-top photovoltaic installations possible. Launched in 2012, this pilot project for the first time allowed operators to feed surplus electricity into the grid and offset the stadium’s own energy consumption against this. GIZ supported the pilot. ‘It then became the blueprint,’ Kissel recalls. With their high-capacity arenas, the host venues for the 2014 FIFA World Cup soon followed suit – initially with financial support from Germany through KfW Development Bank, but later self-financed by local energy suppliers. Then came the private users.  

55 million tonnes of CO2 already saved 

Kissel explains: ‘Permission to feed electricity into the grid is essential. Regulation is the basis for market development. Without it, solar energy remains a niche market, even in countries with optimal conditions.’ In Brazil, this meant making connection to the electricity grid financially worthwhile – and as simple as possible – for private households and businesses. So, in line with the model used for the pilot stadium, GIZ advised the Brazilian regulatory authority ANEEL on introducing the standard that has opened grid access to everyone since 2012. Instead of operators receiving a feed-in tariff, as is the case in Germany, for example, the energy provider credits electricity generated at the applicable consumption tariff and offsets this against energy purchased. For example, credit generated during the day can be used to buy back electricity at night. In most cases, all that remains is a kind of standing charge. This does away with bureaucracy and avoids the need to market separately the electricity generated.  

However, GIZ’s work did not stop with the introduction of the standard. Based on lessons learned from the early years, Kissel and his colleagues advised the authority until 2016: It simplified the regulations, dismantled bureaucratic obstacles, accelerated decision-making processes, and raised capacity limits for the installations. In 2023, the regulatory standard finally became enshrined in law. Today, there are 3.8 million small decentralised installations – about half of them attached to private homes – generating 42.8 gigawatts of electricity. This meets about 17 per cent of Brazil’s electricity needs. This is roughly equivalent to four times the output of the gigantic Belo Monte dam in the Amazon and provides a benefit that transcends national boundaries: since the start of 2023 alone, Brazil has saved almost 55 million tonnes of CO2 equivalents as a result of solar power. This represents the annual consumption for more than five million Germans. 

A market for German companies too 

What started as a niche market has grown into a major industry. Around EUR 44 billion has been invested in the Brazilian solar sector since the regulation was introduced in 2012. If the support provided by GIZ on behalf of BMZ is seen as seed funding, then every euro of German tax revenue has resulted in over EUR 2,600 of Brazilian private investment. German companies operating in this market have also benefited, e.g. Siemens Energy, BayWa r.e. or SMA. Most recently, the Brazilian Photovoltaic Solar Energy Association (ABSOLAR) and German Solar Association (BSW) entered into a partnership to exploit potential for both countries and for climate action. On behalf of the German Federal Ministry for Economic Affairs and Energy (BMWE), GIZ also continues to promote dialogue as part of the Brazilian-German Energy Partnership.