March 30, 2023

Taxing the Sun: Understanding the Tax on Solar Energy

The sun is for everyone, but the energy from it is probably not so much. Who considers the installation Solar Panels PV plants could rethink the idea with the arrival of “sun taxes,” which are nothing more than a tax on Solar energy.

Even today, those who install solar panels at home are exempt from any government taxes. However, the situation has begun to change since last January 7, when the new legislation entered into force.


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Understand the taxes of the sun

Tolls are applied to those who use on-grid solar energy, in this case, connected to the electric grid, which is the most common method in Brazil.

In this model, the excess energy produced is added to the electrical grid, generating credits that can be deducted from the electricity bill. In this system, on days without sun or during the night, the user uses conventional electricity and what is not used from solar energy is returned to the grid.

Until then, the producer was exempt from the cost of distributing this excess capacity, a situation that changes with the legal framework for distributed generation, a law passed by former President Jair Bolsonaro last year that must still be subject to a Senate vote.

However, there is still a deadline for those who want to be approved for an exemption. For existing solar projects or those implemented within 12 months of the law’s start date (January 2022), the sun tax won’t apply until 2045. When it’s full, the consumer will have to charge and you’ll only get 85% of the extra production credit. .

The advantage is that for the time being in practice the discount will still cover the entire useful life of new devices. From January 7, 2023, fees will increase intermittently, increasing each year and reaching full in 2029.

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