Riding the crest of Brazil's distributed generation wave

Wednesday, November 30, 2016

Blue Sol, founded in 2009, was among the first companies to operate in the micro and mini power generation market in Brazil. The company has installed almost 600 grid-connected solar systems and is looking forward to installing a whole lot more. Nelson Colaferro Jr., one of the three founding partners, spoke to BNamericas about this fast-growing sector.

BNamericas: Blue Sol began working with solar systems in Brazil even before distributed power generation regulations were introduced. How did the company originally position itself?

Colaferro Jr.: Blue Sol was created in 2009. At that time, the shareholders decided to spend the company's first year visiting countries with mature distributed power generation markets. We attended events and visited factories and installation sites. We traveled all around the world, from the US and Europe to Asia. We wanted to create a business that was sustainable in the long term, so it was necessary to see how competitive markets worked.

In 2010 and 2011 and for part of 2012, Blue Sol started to work with solar power systems that were not connected to the grid. Then, when micro and mini distributed generation became regulated in Brazil, in 2012, all of our systems were converted to operate on the Brazilian grid. Since then, we have been trying to understand and meet the demands of consumers who want to generate their own electricity.

BNamericas: How many solar power systems has Blue Sol installed so far?

Colaferro Jr.: If we only take into account those connected to the grid, we expect to reach the 600 unit mark by the end of the year.

BNamericas:  [Brazil's electric power regulator] Aneel had forecast the country could have 14,000 solar systems installed by the end of 2016, but the number is likely to be much smaller. Has demand been weaker than expected?

Colaferro Jr.: It is a fast growing market, but perhaps not as fast as some expected. Brazil has multiplied the amount of micro and mini solar systems this year. This is a quite significant number, especially in such a difficult year. In 2015, there were 1,700 plants for distributed generation connected to the grid and there will be 7,000 by December of 2016. We believe custom from residential consumers and companies that have a low or medium voltage supply, which is the most expensive, will continue to increase rapidly.

BNamericas: What is the cost of a micro or mini solar generation system?

Colaferro Jr.: A medium-sized house, the average investment will be between 30,000 and 50,000 reais [US$8,800 and US$14,700]. For a residential consumer, it is not a small investment. So I believe many people want to produce their own energy, but they postponed the investment decision. Today, interest rates are way too high in Brazil, which has a negative impact on the decision whether to purchase. When the Brazilian economy returns to having a normal pace of growth, these people and companies will make that decision, because it's financially worth it.

BNamericas: Are there financing lines available to meet this demand?

Colaferro Jr.: Financing is a critical matter for our business. There are some lines available that create good conditions for new clients, people who want to invest in distributed generation. Or course, we would like to have more credit lines available, in conditions that could fit this market better. However, most of them are only available for legal entities, not for people. Some private banks in Brazil are already financing solar power systems for companies and people, but public banks need to create credit lines to support the development of this market.

BNamericas: Blue Sol also offers professional training in solar system installation. How many people have been trained so far?

Colaferro Jr.: When the company first started, there was a big demand for knowledge in the country. Because of that, we decided to offer professional courses. Today, more than 6,800 have taken our course in almost every Brazilian state. Many of them now work with Blue Sol in our engineering and supply area. Blue Sol is now working on a franchise program to take its professional courses to other regions of the country. The company is ready close its first franchise deals, which will be in Rio de Janeiro, Belo Horizonte, Goiânia, Brasília, Campinas,  São José do Rio Preto and in the state of Paraná.

About Nelson Colaferro Jr.

Nelson Colaferro Jr. is one of the three founding partners of Blue Sol, which as among the first companies to work with distributed generation in Brazil. He is also the president of the administrative council of Absolar, Brazil's solar power association.