MANY MINDEDBrazil's solar curtailment rules deepen grid instability without reviving investment
Brazil's electricity regulator Aneel reported a sharp decline in authorized solar capacity in January 2026, dropping from 110 GW to 60 GW among power plants with potential capacity. This follows 923 solar projects surrendered by developers in 2026—representing 40.6 GW of capacity and $26.3 billion in lost investment per ABsolar. Solar generation curtailment averaged 1.4 GW in 2026, equivalent to 25.3% of total solar output. The new rules (Ordinance 140) establish compensation for curtailment between September 2023 and November 2025, covering 682 plants with 25.5 GW capacity. Crucially, these rules prioritize hydropower and higher-cost generation over solar, reducing solar's share of curtailment allocations. However, ABsolar warns the rules alone won't revive solar investment: new projects remain unlikely despite technical clarity from Public Consultation 45. Curtailment volumes depend on shifting variables like electricity demand growth and storage deployment, and the compensation mechanism excludes oversupply-related curtailment—which accounts for most events. This creates persistent grid instability risks for solar generation without addressing the root cause of investment slowdowns.
The friction here is technical grid instability from solar curtailment, not targeted impacts on vulnerable populations. Brazil's system faces reduced solar output due to curtailment rules that prioritize other generation sources, directly threatening grid stability for solar power. Without resolving the underlying uncertainty about future curtailment volumes, utility-scale solar investment remains stalled. What to watch: ABsolar's upcoming study on distributed generation management and whether settlement pricing mechanisms stabilize curtailment forecasting. The source explicitly states the new rules won't trigger significant new solar projects due to ongoing uncertainty about future curtailment volumes.
Source: pv magazine