It takes courage to be an entrepreneur. Guilherme Correa, a sustainable entrepreneur from Brazil, is a quintessential example of an intrepid entrepreneur who deserves the attention and support of like-minded entrepreneurs across the globe.
Although his home country has abundant solar resources, he saw that Brazil was not a leading country in solar development. Instead of complaining or criticizing, Guilherme took a stand by starting a solar company, SunnyHUB, an energy subscription business. Guilherme founded his company to make solar energy popular in Brazil.
Guilherme believes that what is missing in Brazil to achieve widespread adoption is a successful business model that makes going solar affordable to consumers. That is why he created the subscription model through which the consumer does not pay anything upfront and benefits arrive on day one.
In this magical world of technology and global communication, Guilherme and I (Michael Shore) met through LinkedIn, talked the first time via Skype, and I may even make a small investment in his company through a Brazil-based crowdsource funding site, Cluster21. My first endeavor as a sustainable entrepreneur was also a solar company, and so I relate to and appreciate Guilherme’s story.
When I think about the world solving its most pressing challenge of climate change, I look to smart, young, charismatic leaders, like Guilherme. Please read Guilherme’s take on the solar opportunity in Brazil, share his post below widely, and visit his website. And, I invite you to comment on this blog post if you have a word of encouragement for Guilherme.
Introduction to Guilherme’s Article By Michael Shore
Rising Electricity Rates in Brazil
Written by Guilherme Corrêa
Brazil has great potential for solar energy. The country has one of the most expensive electricity rates in the world and the cost per kWh has risen 2 to 3 times faster than inflation in the last five years.
The country’s electricity mix is cleaner than most countries. It relies heavily on hydropower, which is supposed to be cheaper. Nevertheless, Brazil faced in the last few decades two major forces that created the need for a transformation of its energy sources.
First, all new hydropower stations were built without reservoirs, which made the country’s energy infrastructure dependent on consistent rainfall. The lack of reservoirs and the small capacity of new projects drove the country to bet more heavily on thermopower stations, powered with gas, coal, and oil. Brazils electricity mix became more harmful to the environment and more expensive to the end consumer.
The second transformation is regarding government. Most states in Brazilian became bankrupt when the country faced its largest recession on record in 2016-18. The state governments were already spending more than their total tax revenues when the recession hit, and the budgets became completely unsustainable. In response, state governments increased taxes and fees on a variety of services, especially energy.
In this landscape, a kWh went from about R$ 0.42 in 2014 to R$ 0.88 (Brazilian Reals) in 2019, or about US$ 0.23. And this happened in a period of time in which the economy did not grow. Electricity rates are projected to surpass US$ 0.30 in 2020, higher than even Hawaii). Consumers are eagerly looking forward to alternatives as energy has become, for many, the top expense in the family budget. Datafolha, a pollster, suggests almost 80% of Brazilian consumers want to go solar in order to escape from rising utility rates and become more sustainable.
Solar Incentive Comes to Brazil
In 2012, the government’s electricity regulator started allowing a net-metering program in which consumers could power the grid with their own generated kWh in exchange for credits against their utility bills. For instance, if the consumer has powered the grid with 100 kWh in the past, he can use this credit to pay for 100 kWh he eventually uses from the grid. This program makes it possible for consumers to almost reduce their utility bills to almost nothing.
In the following years, other incentives were created. Import duties for solar modules were eliminated and state taxes on them were reduced. Also, the tax exemption for full solar systems (inverters, modules, cable, etc) was established. These incentives plus high solar irradiance in most of the country make it financially attractive for people to own solar systems on their roofs. The payback can be as little as three years in many regions.
Business Models that Unlock Brazil’s Solar Potential
Even with these incentives, solar has not yet taken off in my country. The issue is that people cannot afford to pay the upfront cost and the available financing is not affordable. The country’s overall capacity is less than 2 GW (a little more than 500 MW when considering installations of less than 5 MW). In comparison, the US installed 10.6 GW of solar photovoltaic capacity in 2018 alone. Germany, a country with far fewer sunny days, installs about 3 GW every year.
To enable Brazil to move faster toward a sustainable energy future, we created SunnyHUB, the pioneer solar leasing company for households in Brazil. Our model offers cheaper energy for consumers in a way that is profitable for the company — a win-win scenario. Feel free to learn more about my mission to make solar popular in Brazil by contacting me at email@example.com, and you can access our equity crowdfunding campaign at www.cluster21.com.br
Click here for Guilherme’s LinkedIn bio.
Click here for a previous blog that Guilherme published on Medium on solar opportunities in Brazil