Brazil’s Burgeoning Solar Market

Brazil Solar Irradiance

Brazil has started to become a major player in the global solar game; the economy of Brazil aims for $3 billion in the solar sector within the next 20 years. The plans started mid 2012 when the ‘Agencia Nacional de Energia Electrica’ (ANEEL) announced a new regulation for solar panels concerning net metering. ANEEL decided that homeowners and small business owners could offset their electricity consumption through solar energy generated during the day, to compensate for the energy consumed during the night. The legislation covers photovoltaic power generation up to one megawatt.

With increased movement in the area, the large photovoltaic event ‘Intersolar South Intersolar Brazil 2013America’ was held in Sao Paulo, Brazil last month. The 64 exhibitors had the opportunity to educate Brazilians attending the convention on all things solar; most of them eager to learn more about the upcoming solar market in their country. Although there was great enthusiasm at Intersolar SA, there is still little movement. The government’s recent opening of energy auctions to solar technology, and other new regulations, make for a budding solar market; however, there are still a number of barriers to overcome. For instance, not many people are qualified to receive incentives, and only about 200 models of some 25 manufactures have been approved for use. With solar just starting to take hold in Brazil, the very favorable tax framework for PV gives the country a positive forecast with no less than 100 GW of installed photovoltaic power by 2050.

With new laws passed, Brazilian homeowners are now able to apply for state financing when they invest in solar electric systems. The only requirement is that the solar installation must consist of at least 60% domestic components. This regulation should make it much more attractive for Brazilian homeowners to invest in solar power, which has already increased the demand and supply of solar panels in Brazil, and is expected to continue to increase in the coming years.

To Own, or to Lease, That is the Question

The modern crystalline solar cell has been around for roughly 50 years. With advances in module and manufacturing efficiency, as well as, an ever increasing global demand, prices for solar equipment has dropped greatly; most significantly in the last 10 years. Even though solar electric systems are more affordable now than ever, the average American is used to purchasing their power monthly, and the idea of buying 25 years of electricity all at once can prove to be an intimidating concept (no matter how great the potential savings may be). Government incentives have helped a lot to relieve some of the upfront cost to invest in solar, but that still leaves about 30% – 70% of the total cost of the system.

As a way to create a no upfront cost solar option (much like people are used to with cars and other expensive purchases), several financing structures have been created over the past few years, mainly: Power Purchase Agreements (PPAs), solar equipment leases, and solar loan programs. While the three have many similarities, there are several details that set them apart in how they function.

The solar lease has become the most popular way for homeowners to get started with solar. Depending on what the local incentives are, and the local price for utility electricity, there are different pricing structures available. Generally, there is a zero-down offer, a small up-front, and a pre-paid lease option. The solar lease is built like any other lease: the leasing company owns the equipment, and the customer pays an agreed upon monthly fee to use it. The benefit of solar equipment, as compared to a car, is that it has a defined monetary value to the customer ( i.e. free energy). The goal of the solar lease is to pay less on your leasing fee, than you would have otherwise on your electricity. Depending on the leasing company, you can adjust the annual price escalator, or put down some or all, of the lease payments upfront, which will determine if you get more savings at the start of your lease or closer to the end. Most leases on the market today lock the customer into a 15 – 20 year agreement, and at the end of the contract the customer has three options: to purchase the system at fair market value, to renew the lease at renegotiated terms, or to have the system removed free of charge. The main attraction of the lease, is that since the property owner does not own the equipment, and is simply agreeing to purchase the power produced by it, it is the leasing company’s responsibility to maintain the equipment for the life of the lease, and make any repairs necessary, to ensure that they are getting the maximum output, and thus, maximum monthly fee.

solar lease savings chart

The PPA is a similar concept, but instead of leasing the equipment, you are strictly purchasing the clean energy it produces. Again, the PPA provider owns and maintains the solar array for the life of the system. Upon signing an agreement, the customer agrees to purchase all energy produced by the array, at a determined price, which, depending on how it is arranged, will either remain the same or gradually increase over the term of the PPA. In both a PPA and a lease, the financing company usually takes all incentives as they become available, reducing that stress and burden from the customer, and passing the savings along as well. At the end of the PPA, the customer often has the same options as those at the end of a lease. For the most part, PPAs are offered to larger commercial or utility scale projects, whereas leases are the most popular financing option for residential projects.

Just as in the car world, where there are adamant car leasers vs. die-hard car owners, an ever increasing option for purchasing solar, is the tried and true bank loan. While few banks have come on-line to officially offer a solar loan program, those that are, are being met with increasing demand. The loan programs vary depending on the provider, but have key features that make them attractive alternatives. Just like in the lease and PPA, the solar loan is built so that the customer is left with a manageable and predictable monthly cost, as opposed to the volatile current state of electric prices. The clear difference of the loan is that the property owner is the direct owner of the solar equipment. After the loan is paid off, the system belongs to the property owner, and while solar panels are under warranty for 25 – 30 years, they often continue to operate for over 40 years. This means that all the energy that comes from the system after the loan is paid is all free (woohoo!), but also requires the owner to take responsibility for maintenance throughout the life of the system.

No matter how you choose to start using solar power, there is an option out there for you. If you are interested in getting started in the process of looking into solar for your home or business, contact us, and we will help to walk you through all the available options, and see what works best for you.

Solar Incentives

Just like many consumer products we use, solar equipment has gone through, and continues to go through, several incentive programs and financing structures in an effort to make it affordable and available to as many people as possible. The first step towards making solar a viable option to reduce energy costs is the ability to deposit unused electricity from your solar array, into the local grid, at times when your solar production is greater than your electrical consumption, known as “net-metering”.

Net-metering makes it possible for the utility company to keep track of how much electricity you have contributed to their grid, and they deduct that amount from your monthly bill. By properly calculating previous electrical usage, and sizing an appropriate solar array, it is possible to completely offset your yearly electrical usage by using solar power*. This is the most basic value of every solar module across the globe; by producing electricity on your property, you no longer need to buy it from the utility. The exact value of your solar energy is whatever the cost of electricity is in your area.

In the US and overseas, there have been several different incentive programs that have helped reduce the burden of the initial cost of solar energy, as well as rewarding continued solar production. Cost incentives have come in the form of tax credits, as well as $ per watt rebates. After paying to install your solar system on your home or business, you can take a percentage of the total cost of installation, and deduct that amount directly from your yearly income tax requirement. That means either writing a much smaller check to the government, or, even better, getting a big check back in the mail. Other incentives, offer an exact dollar amount, for every watt installed. Often these programs start with a large value per watt, and diminish over time as more systems get installed. New York has recently started such a program, so you better get your paperwork in early before funds get depleted. Many solar installers have restructured their payment options, so that the customer has less money to pay up-front, and the installer files for the incentives, and waits for those checks to come**.

Rebate Programs for Renewables

Incentives based on performance come in the form of Renewable Energy Certificates (RECs) and Feed-In-Tariffs (FITs). Depending on the location, one REC is rewarded for every pre-determined amount of solar energy produced, often per 1000 kiloWatt hours (kWh). Once a solar owner accrues these RECs, they can be sold on the open market to utility companies, who are required by the state to purchase RECs to account for their renewable energy production towards their Renewable Portfolio Standard (RPS).  While RECs have proven to be a popular way to get people to install solar, they have also proven to be a very volatile commodity, with their values fluctuating drastically, making for nervous solar investors. FIT’s are similar in that they are rewarded per unit of energy as it is produced, but it generally has a more defined value, and is doled out directly from the utility to the solar array owner. Where REC values fluctuate with the market, FITs have set prices.

These are some of the most common solar incentive programs in the US. Feel free to comment if you know of other forms of incentives available in the US or abroad.

*On the technical side, net-metering is important for another reason. Solar modules can turn sunlight into electricity, but they cannot store that energy. Instead of installing a battery bank connected to your solar array, so that you can use electricity at night when the sun isn’t shining, we use the grid for this purpose. By generating more energy during the day than we need, we are able to offset out nightly usage. By properly calculating local average daily sun hours, along with shading, azimuth and tilt, you can accurately calculate how much a solar array will produce in a given year.

**Check for complete lists of all energy efficiency upgrade incentives, and contact a local solar installer for up to date information.


Solar Power 101

In trying to come up with a topic to blog about, it dawns on me that it is always best to start with the basics. For the experts, this will seem pretty elementary. For the newcomers, I hope this helps shed some light on the wonderful world of solar.

Solar power is a pretty simple beast, disguised behind words like “photoelectric effect” and “solar irradiance”, which tend to intimidate most solar beginners. Most crystalline solar modules are made with similar construction: a matrix of crystalline solar cells strung together, sandwiched between either two layers of glass, or a layer of glass and a backsheet. Generally, a frame is attached to the module in order to make it easier to mount on various structures. The leads from the solar cells are strung through a junction box on the back of the module, and attached to cables to connect with other modules, or other electrical systems. It is the meat in our solar cell sandwich which performs the miracle of producing electricity.

The crystalline cell, whether mono or poly, is made from materials which create a current when exposed to sunlight. When the sun’s rays make contact with the solar cell, an electron jumps from one side to the other. The cells are wired together, so that when those electrons start moving, they are escorted out of the cell by way of our cables, thus creating electric current, or electricity.

photoelectric effect Sonali Solar how a Solar cell works

By angling the face of the module perpendicular to the sun, you increase the power that the modules can output. For a fixed angle solar array, the optimal angle for year round production should be set to the locations latitude. For New York City, that means the optimal angle would be about 41°. Of course, to increase annual production, there are a variety of solar trackers that are either automatically or manually adjusted to maintain a better angle towards the sun.

Now, due to a battle lost by Thomas Edison years ago, the electricity used in our homes by our lights and appliances, is Alternating Current (AC) electricity. The power produced by our solar modules is in the form of Direct Current (DC) electricity. In order to convert the electricity from DC to AC, we run it through an inverter so that the power can be used by our homes and businesses. With the use of net-metering, all excess electricity not immediately used is pumped back into the local grid, or stored in a battery bank to be used at a time when the solar modules are not producing enough power to supply the demand.

As our blog “The Sundial” progresses, we aim to delve deeper into the world of solar power. While the technology that crystalline solar modules are based on has been mostly unchanged for many years, the intricacies of the solar economic climate, as well as details in module production can largely influence the overall economics and longevity of every solar installation. As we peel away the surface, we hope to enlighten our readers as we near the core of the issues.

**All solar puns, though maybe not humorous or clever, were entirely intentional.

Welcome To Sonali Solar’s Blog: The Sundial

Sonali Solar The Sundial Logo

At Sonali Solar, we are not here because we heard of a new fad. Solar power to us is not a trend or a movement. We look up at the sky every day, and we see an unlimited source of power. We look at the faces of our friends and family, and we see the need to start something.

Sonali Solar was started in 2007, by a group of brothers who started to notice the energy climate around them. Born, raised, and educated in India, The Desai’s now do business based out of New Jersey; globally the conversation of solar is shifting. After successfully starting and maintaining a wholesale diamond distribution, and commercial real estate companies in India and the US for over 50 years, the Desai’s decide to enter into a new venture, solar module manufacturing.

It is now 2013, and Sonali Solar owns and operates one of the most state-of-the-art solar manufacturing facilities in the world. With our fully automated production line, Sonali Solar manufactures modules from 3 to 300 watts, without them ever touching a human hand. While the majority of our production is focused on modules from 230 to 300 watts, we also manufacture smaller modules for customers with detailed specifications, ensuring that our products can be seamlessly integrated into operation. In order to make certain that every module we construct produces as much electricity as possible, each module passes through an electroluminescence (EL) tester twice before leaving the factory.

Sonali Solar is constantly working to improve production, and integrate new technologies into our products. From internal research and development, to forming integral business partnerships, our top priority is making sure our product is at, or above, the quality of the best equipment on the market.

Now we are starting The Sundial; our new blog operating as your window into our world. If you ask most solar professionals what the biggest roadblock is to mass adoption of solar power by the public, and they will tell you one thing: Education. We at Sonali Solar know how solar power works, and how to make it work for you. There is no secret or mystery to the solar market, and The Sundial is here to offer as much clarity and information on the subject as possible.

Welcome to Sonali Solar, Energy Inspired By Nature.

-Daniel Resnick