Brazil’s renewable energy sector is confronting what many industry leaders call its most serious challenge yet: accelerating curtailment of solar and wind generation. According to Rodrigo Sauaia, president of the Brazilian Photovoltaic Solar Energy Association (Absolar), the issue—long acknowledged by developers and policymakers—is worsening as renewable penetration increases across the national grid.

Curtailment Rates Climb Sharply in 2025

New data from Brazil’s National System Operator (ONS) shows that solar curtailment rates in 2025 have surpassed those recorded during the same months in 2024.

• August 2025: 20% of available solar output was curtailed
• August 2024: 12% curtailed

Between January and August 2025, an average of 13.7% of real-time solar availability was cut from the grid, compared with 9.7% from April to December 2024. ONS tracks interruptions arising from grid reliability requirements, energy constraints, access issues, and external unavailability.

Despite these published figures, Sauaia argues the numbers still underestimate the real impact on generators.

Financial Losses Mount—But Much Goes Uncounted

“At least BRL 1.7 billion (USD 315 million) in losses have hit the sector, yet ONS recognizes only BRL 1.1 billion,” Sauaia told pv magazine Brasil at Intersolar 2025. “Nearly half of the economic damage goes unreported.”

Why the gap?

• ONS data disregards periods when no radiation or wind information is available
• Multiple outages occurring within the same 30-minute window are consolidated into one entry

This creates opaque financial risk for developers and lenders. According to BloombergNEF lead analyst Vinicius Nunes, the industry is already seeing investment slowdowns and tightening access to financing for centralized solar projects.
Solar curtailment:

• 2024 average: 14%
• 1H 2025: 21%

Nunes warns that developers should now treat curtailment as an integral project variable:
“These cuts must be built into new project models. Curtailment could surpass 30% by 2030. It won’t stop new projects, but it will drive up financing needs.”

Regulators Consider Compensation Mechanisms

To cushion the financial blow, Absolar is advocating for full reimbursement of curtailed energy. Brazil’s power regulator ANEEL recently held meetings with sector associations, development banks (including BNDES and BNB), and major commercial banks such as Itaú, Santander, Bradesco, and BTG.

A central focus was Public Consultation 45/2019, which could establish a compensation framework for generation cuts.

ANEEL said it aims to develop short-term measures to ease liquidity constraints—an urgent concern for both project sponsors and lenders evaluating future renewable investments.

Underlying Causes: Infrastructure Still the Weak Link

But compensation alone won’t resolve the operational reasons behind increasing curtailment.

Sauaia estimates that:

• 25%–30% of outages stem from inadequate transmission infrastructure
• Another 25% relate to grid stability and robustness

In total, roughly half of all curtailment is rooted in infrastructure shortfalls.

To address grid stability issues—such as voltage control, frequency support, and power quality—the National Council for Energy Policy has approved the deployment of synchronous compensators at key substations.

Renata Carvalho, adviser at Brazil’s Energy Research Company (EPE), notes that BRL 56 billion is allocated for 15,000 km of new transmission lines and compensator installations scheduled for 2028–2030.

However, the situation remains critical today:
“Transmission margins in the Northeast are at zero. Connection requests are being denied, and curtailment continues to escalate,” Carvalho said at the Intersolar Congress. Studies are now revisiting transmission planning criteria after the widespread blackouts of November 2023.

Demand Response and Storage: Key Tools to Ease Curtailment

Much of the growing mismatch between when energy is generated and when it is consumed can be mitigated through new pricing structures and widespread deployment of storage, experts say.

“We need stronger price signals,” Sauaia stressed.
Lower daytime energy prices combined with adequate infrastructure could encourage:

• Industries to shift or reschedule operations
• Agricultural producers to irrigate or refrigerate during solar peaks
• Households to adjust consumption or charge batteries when energy is cheap

Carvalho adds that demand aggregation—especially for large industrial loads—can help absorb excess solar.

The Northeast alone hosts 18 proposed green hydrogen plants that could bring:

• 23 GW capacity by 2030
• 44.3 GW by 2038

Data centers, another fast-growing load category, could require up to 3 GW, increasing competition for scarce grid access.

Market Mechanisms and New Technologies on the Horizon

Beyond traditional grid expansion, experts highlight additional tools to reduce curtailment:

• Negative pricing and curtailment auctions
• More flexible hydro dispatch to complement variable renewables
• Distributed storage combined with expanding rooftop PV
• Vehicle-to-grid (V2G) services that allow EVs to act as mobile batteries

According to Volt Robotics CEO Donato Filho, integrating EVs into the grid could become a major balancing resource as Brazil’s electrification accelerates.