Brazil vs USA: What the Crisis in the US Solar Sector Reveals About the Risks of Premature Market Restrictions in Brazil
- EnergyChannel - United States.
- May 6
- 3 min read
In recent years, the solar energy market—once celebrated as a symbol of the energy transition—has begun to face significant turbulence. Iconic companies such as SunPower, Titan Solar Power, and Sunnova in the United States have declared bankruptcy or are in serious financial trouble. In Brazil, the sector is still growing, but signs of stagnation and structural challenges are beginning to appear. So, what changed?
From Boom to Reality Check
Over the past decade, in both the US and Brazil, the solar market has been driven by subsidies, tax exemptions, falling equipment prices, and a large pent-up demand. New players entered the market in droves. However, the sector now seems to be entering a new phase—less euphoric, more challenging.
In the United States, inflation, rising interest rates, and changes in federal and state policies have directly impacted financing models. Companies heavily reliant on residential leases or PPAs (Power Purchase Agreements) are now facing high default rates and lower adoption. Additionally, the reduction in compensation schemes—such as the end of NEM 2.0 in California—has affected the return on investment for end consumers, making solar less attractive.
In Brazil, the end of full exemption from wire charge B (as per Law 14.300) and rising operational costs are also starting to take a toll. The market is being forced to evolve from a "quick sale" model to a more consultative process focused on energy efficiency, storage, and engineering-based solutions.
Corporate Lobbying and Resistance to Decentralization
Another similarity between the two markets is the role of large traditional electric utilities, which often act through lobbying efforts to slow the growth of distributed generation. In the US, there is concrete evidence of utility-backed campaigns against 1:1 net metering. In Brazil, pressure for new compensation rules, artificial technical limitations, and delays in connection approvals signal a silent resistance to consumer empowerment.
Market Maturity and the Need for Reinvention
The solar market is not in “collapse,” but it is entering a stage of maturity, where competition is fiercer, technical differentiation is critical, and the sales discourse must be rooted in expertise, credibility, and energy planning.
We are witnessing a shift from the early adoption phase—enthusiastic and deregulated—to an era in which only companies with solid structure, strategy, and technical capacity will thrive. Meanwhile, consumers are more cautious and better informed, especially amid fragile economic conditions in both Brazil and the US.
Comparing Maturity Levels: Brazil Is Still in Early Stages
Before following the same regulatory path as the US, it is essential to recognize that both markets are at very different maturity stages:
Restricting Now Is Like Killing the Market in the Cradle
In the US, the crisis resulted from structural changes in a mature market. In Brazil, current obstacles—such as bureaucratic hurdles and regulatory uncertainty—are choking the market before it can fully consolidate.
Paths Forward
The future of solar energy remains promising, especially with the advancement of battery storage, hybrid systems, and integration with energy efficiency and electric mobility. But it is time to abandon the illusion of endless growth based solely on incentives and aggressive marketing. A reinvention of the business model is urgent.
In short, the sector is changing—and that’s not necessarily bad. It’s a sign of maturity. Now, it’s up to entrepreneurs in the sector to adapt, so that solar energy can continue to be a protagonist in the global energy transition.
A Lesson to Learn: Don’t Repeat the Same Mistake
The crisis in the US is a warning. Brazil needs regulatory stability, strategic vision, and a genuine commitment to energy democratization.
Eduardo Nicol is the CEO of RENEW Energia in Brazil and CFO of SUN-I Solar Energy in the United States. He has been active in the renewable energy market since 2014 and has over 30 years of experience leading complex projects in the telecommunications and information technology sectors.
Sources:
SEIA (Solar Energy Industries Association) – www.seia.org
ANEEL (Agência Nacional de Energia Elétrica) – www.aneel.gov.br
IEA (International Energy Agency) – www.iea.org
EIA (U.S. Energy Information Administration) – www.eia.gov
ABSOLAR – www.absolar.org.br
Brazil vs USA: What the Crisis in the US Solar Sector Reveals About the Risks of Premature Market Restrictions in Brazil
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