According to the latest forecast from the Brazilian Photovoltaic Solar Energy Association (Absolar), Brazil’s total installed capacity of solar energy systems is projected to expand 7% less year-on-year in 2026. The association’s analysis points to three core factors putting pressure on industry growth: high interest rates, regulatory barriers, and the 25% import tariff imposed by the Lula government (Workers’ Party) on solar panels in June 2025.
A report released by XP Investimentos further confirms the downward trend in the industry, stating that both power generation curtailment and high interest rates will directly hinder the growth of Brazil’s solar sector in 2026. Data shows that without the import tariff policy, energy producers originally estimated that 2025 could have created 396,000 jobs and contributed 13 billion reais in tax revenue to the country. However, under the current federal government policies, Brazil’s solar power generation has already declined by 24%, and related investments have shrunk by approximately 10 billion reais.
Currently, the Brazilian Federal Senate is reviewing Bill No. 4607/2024, proposed by Senator Marcos Rogério of the Progressista Party from Roraima. The bill aims to cap the import tariff on solar panels at 9.6%, thereby revoking the Lula government’s earlier tariff increase. Rogério explicitly stated, “The 25% tariff is an abuse of authority and offers no benefit to the domestic industry—Brazil’s local industry is currently unable to meet the growing market demand of the sector.”
It is reported that the bill was formally submitted in 2024, with Senator Sérgio Moro of the União Brasil Party from Paraná responsible for its review. However, no substantial progress has been made so far.
Industry insiders also recall that during the administration of former President Jair Bolsonaro (Progressista Party), the import tariff on solar panels was reduced to zero to promote import trade and renewable energy development. Since the Lula government took office in 2023, the tariff has been gradually raised from 0% to 6%, then to 9.6%, and further increased to 25% in 2024. The government’s justification for this was to support the growth of the domestic photovoltaic industry.
