The Brazilian government has raised the import duty on solar modules from 9.6% to 25% this week.
According to the Brazilian PV association ABSolar, this measure could undermine the country’s energy transition, potentially increasing solar energy costs, leading to capital flight, higher inflation, job losses, and company closures.
The new rules have yet to be published in the Official Gazette.
“By deciding to increase the duty in the middle of COP 29 in Azerbaijan, the Brazilian government is contradicting international commitments to combat climate change, especially those signed in the Paris Agreement and the United Nations Conference on Climate Change (COP),” the association said in a statement.
ABSolar claims the tariff hike could lead to cancellations of contracted projects and disrupt future investment plans.
In a survey with members, ABSolar identified 281 at-risk projects, totaling over 25 GW and BRL 97 billion ($16.7 billion) in investments through 2026. The higher import duty would make these projects financially unfeasible due to the automatic loss of financing tied to them.
“Contrary to what the federal government claims, the measure does not promote the densification of the national industry, since the national companies are merely module assemblers, using entirely imported components,” the association stated. “On the other hand, the impact of the measure on small and medium-sized installation companies is serious, and they run the risk of closing their doors.”
The national industry currently cannot meet more than 5% of Brazil's demand for solar panels, with a production capacity of just 1 GW per year. In contrast, Brazil imported more than 17 GW of solar panels in 2023.
