Very low cost rooftop solar slashes domestic energy cost – Part 2: South American Countries
As photovoltaics continues getting cheaper, an increasing number of countries are adapting their regulatory frameworks to facilitate its integration into electricity markets. Brazil is currently adding more than 1 GW of new PV capacity each month, with the majority coming from small-scale, distributed rooftop installations. In this regard, Brazil stands out as an exception in South America. The country’s rapid solar expansion is not primarily driven by lower solar module prices compared with neighboring Latin American countries. Instead, it is largely the result of high conventional electricity prices, accessible financing, supportive regulations, tax incentives, and the scale of its energy market.
By International Solar Energy Society (ISES) 23 Jun 2026
Brazil’s relatively high residential electricity prices are one of the main reasons rooftop solar has expanded so rapidly. In many parts of the country, residential consumers face elevated retail electricity rates due to a combination of distribution costs, taxes and surcharges, and cross-subsidies embedded in the tariff structure, designed to subsidise the low tariffs paid by low-income residential dwellings. As a result, households can often offset electricity that costs approximately $0.15–0.30 per kWh, depending on location and tariff, allowing solar systems to achieve attractive payback periods (typically 3 to 5 years). The introduction of net metering in 2012, coupled with a sharp acceleration in adoption after 2020, drove substantial growth in solar photovoltaic generation. As a result, solar PV rose from the seventh largest to the second-largest component of the country’s energy mix. This contrasts with several neighboring countries. Argentina and Bolivia have historically maintained heavily subsidized electricity prices, reducing the economic incentive for rooftop solar. Paraguay benefits from some of the lowest electricity costs in the world thanks to the Itaipu hydropower plant, while Peru’s residential tariffs are generally more moderate. Chile has comparatively higher electricity prices, but other market and regulatory barriers have constrained residential solar adoption. When grid electricity is already inexpensive, the economic case for rooftop solar becomes significantly less compelling.
Brazil created a very favorable net-metering system
A key factor behind Brazil’s rooftop solar boom was the creation of a highly favorable net-metering framework. For many years, distributed generation regulations allowed homeowners to receive nearly full credit for excess electricity exported to the grid, substantially improving the economics of residential solar projects. This regulatory stability gave households confidence that they would be able to recover their investments, while also providing banks with a reliable basis for financing solar installations and enabling installers to scale their operations. The result was a rapidly expanding residential solar market supported by both consumer demand and access to capital. In contrast, many neighboring countries adopted distributed generation policies later or implemented less generous compensation mechanisms, reducing the financial attractiveness of rooftop solar and slowing market development. Consequently, Brazil stands out globally: nearly 70% of its installed solar PV capacity (over 70 GW) consists of small-scale distributed generation systems, with rooftop installations accounting for roughly 80% of that capacity.