Brazil to Install More Rooftop Solar: Where Are the Energy Storage Opportunities?

Start with a small factory in São Paulo: at noon, rooftop solar panels operate at full capacity, and the electricity meter barely turns; in the evening, when the machines restart, the electricity purchased is peak-rate power. This temporal mismatch is precisely the challenge that Brazil’s next phase of power expansion must address.

On November 4, 2026, Brazil’s Ministry of Mines and Energy (MME) and the Energy Research Office (EPE) released a special study on the 2036 ten-year energy expansion plan: by 2036, the installed capacity of micro and small-scale distributed generation could reach 91.7 gigawatts (GW), with investments of approximately 95.9 billion reais from 2027 to 2036. Solar photovoltaics account for 99% of this capacity, and the number of adopters is expected to reach approximately 13.5 million. These facilities are located on the consumer side, serving households, businesses, and enterprises.

Don’t mix up the three sets of figures

The 91.7 GW, equivalent to 91.7 million kilowatts, refers to cumulative installed capacity, indicating equipment capability rather than the electricity generation of a specific year. The 53 TWh, approximately 5.3 billion kilowatt-hours, represents the projected avoided electricity demand by 2036, primarily driven by efficiency improvements: performing the same work with high-efficiency equipment reduces power consumption. The 276 TWh, approximately 27.6 billion kilowatt-hours, includes electricity saved, self-consumed power not fed into the grid, and micro and small-scale distributed generation; it cannot be entirely attributed to new solar PV installations. These three metrics use different accounting standards, which clarifies the market boundaries.

With the increase in solar power, regulation is needed

Power generation is concentrated during the day, while peak demand often occurs at other times. Research therefore emphasizes the coordination of supply and demand through energy storage, demand response, digital control, and resource aggregation. Planning documents also identify battery energy storage and pumped storage as flexibility resources. Demand response refers to users shifting their electricity consumption in response to price signals or incentives. By 2036, incentive-based demand response is projected to contribute 4 GW of effective capacity, though power metrics must still be distinguished from annual energy volumes. Policy trends align with this direction: net metering and Law No. 14,300 underpin distributed solar photovoltaics. However, compensation for surplus electricity has diminished as the allocation ratio for grid usage fees has increased, making self-consumption more cost-effective.

Law No. 15,269 designates energy storage as an independent entity. The free electricity market is being opened in phases, and time-of-use pricing makes electricity cheaper during the day and more expensive in the evening. Once this price differential is clearly established, shifting midday electricity to evening use becomes a viable business opportunity.

A Detailed Look at Battery Orders

The report evaluates three categories of behind-the-meter battery applications, specifically energy storage installed on the user’s metering side that primarily serves its own load. Economic viability remains concentrated in specific scenarios, with the most promising being energy management for certain industrial and commercial electricity rate users. The return on behind-the-meter storage is highly dependent on peak-valley price differentials and regulatory approvals, while the market exhibits a pattern of product development preceding demand emergence.

Whether batteries are profitable requires a simultaneous assessment of electricity tariff structures, hourly consumption patterns, investment costs, and operational rules. Expanding installed capacity merely lays the foundation for demand and does not guarantee identical returns for every household.

Modules, inverters, batteries, energy management software, high-efficiency motors, and data center cooling equipment are all relevant to this sector. However, the 95.9 billion reais figure represents only a ten-year forecast; project execution, bidding, and delivery remain subject to subsequent market dynamics. A more immediate reality is localization: Sungrow and Huawei Digital Power supply power conversion systems (PCS) and energy storage systems, while BYD, JinkoSolar Energy Storage, and CATL participate through local assembly and partnerships. Additionally, local content requirements in capacity auctions are raising entry barriers.

The authorities have also identified as variables the entry of low-voltage users into the free electricity market, time-of-use tariffs, and the value of distributed resource services. The public consultation period for the 2036 Decennial Energy Plan (PDE 2036) closes on November 6, 2026, and the final plan and accompanying regulations may still be adjusted.