Zero tax will not make solar panel cheaper

The decree that eliminated federal taxes (IPI, PIS/Cofins and Import Tax) on solar panel components until 2026 should not have an immediate impact on the price paid by the consumer.

According to Rodrigo Sauaia, executive president of Absolar (Brazilian Association of Photovoltaic Solar Energy), the decree will stimulate the national panel industry, which in the long term tends to lower costs, but the effects take time.

“It is an industrial policy measure. It has an effect on the raw materials and components that are used in factories in a number of industries. Including photovoltaic modules, photovoltaic cells and semiconductor industries, which are the main materials used in solar energy photovoltaics. It is, therefore, a positive measure”.

Brazil manufactures photovoltaic components, but on a small scale, insufficient to meet domestic demand. By reducing taxes, the government intends to stimulate the industry of photovoltaic modules and components in the country, not depend so much on imports and create so-called “green jobs”.

For Absolar, however, there are gaps in the decree. The sector defends the inclusion of items such as inverters and batteries. Inverters are considered the “brain” of the photovoltaic system and batteries are necessary to bring solar energy to isolated areas.

Brazil has the potential to become an exporter of solar panels to countries in Mercosur, the USA, Europe and Africa, according to Sauaia.

“Brazil is the only country in South America that has the scale and size to become an industrial hub for photovoltaic solar energy and has the conditions to manufacture to meet its domestic demand, which is important, and export to Mercosur countries and others allies who need technology and don’t want to depend so much on Asians”.

What do distributors say?

For energy distributors, care must be taken when stimulating an industry that only pays a fraction of the distribution, burdening other energy consumers.

“By reducing the cost of the plates, it increases the attractiveness to consumers, and until 2029 there will still be a reduction in what solar pays in transmission and distribution tariffs. This difference will go to the CDE [Conta de Desenvolvimento Energético] increasing the tariff for all other consumers. But being a tax incentive is better than being a subsidy paid for by the energy tariff, which has been happening since 2012”, says Ricardo Brandão, executive director of Abradee (Association of Electric Energy Distributors).

The distributors defend that it is fundamental for the country to have public policies for the reduction of energy tariffs: “There are studies that show that the reduction of the tariff by 10% generates an increase of 0.45% of the GDP. Reducing the energy tariff is fundamental” , complete.

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