[SMM PV News] Solar Self-Generation Could Cut Industrial Power Costs in Brazil by Up to 33%

Published: Apr 17, 2026 10:08

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Researchers from the Federal University of Ceará and Federal University of São João del-Rei evaluated contracting strategies in Brazil’s Free Contracting Environment (ACL), comparing long-term PPAs with solar PV self-generation for large industrial consumers. Using stochastic modeling, the study found that direct-investment self-generation can reduce costs by up to 32.9% compared with PPAs, with an IRR of 11.8%–18.1% and a discounted payback period of about 10 years. However, self-generation carries higher risks related to capital costs, O&M expenses, solar resource variability, and electricity price fluctuations. Regulatory exemptions—especially discounts on TUSD and other sector charges—play a crucial role in improving project economics and cash flow stability.

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