As of March 2026, Brazil's total installed grid-connected capacity has reached 217.5 GW, with solar power accounting for 10% (21.5 GW) and wind power representing 16% (34.8 GW) . The country stands as the sixth-largest electricity generator globally, with an impressive 90% of its power coming from low-carbon sources-a target it achieved six years ahead of its 2030 schedule.
This remarkable growth, however, is driven by necessity. Persistent drought conditions, intensified by climate change, have led to a historic decline in hydroelectric power, with its monthly share falling below 50% for only the second time on record. To fill this gap and curb coal-fired emissions, Brazil has rapidly expanded its wind and solar capacity. Over the past five years, photovoltaic generation has increased sixfold, growing from just over 2% to 13% of the energy mix . Consequently, the power sector's carbon emissions have been reduced by 31% from their 2014 peak, even as overall electricity generation rose by 22%.
Market Dynamics and Recent Policy Shifts
In January 2026 alone, Brazil added 543 MW of new capacity, primarily from 11 new solar PV plants (509 MW) . The market is largely liberalized, with eight of the top ten power companies being privately owned, fostering a competitive landscape.
Recent regulatory developments continue to shape the sector. Law No. 15,269/2025, enacted in late November 2025, introduces significant changes, including a framework for energy storage and a timeline for fully opening the electricity market to all consumers by late 2028 . Importantly, this law also establishes mechanisms for compensating solar and wind generators for curtailment-the forced reduction of output due to grid constraints-for the period between September 2023 and November 2025 .
The Challenge of Curtailment
Despite policy progress, the industry faces a critical hurdle. In 2025, approximately 20% of wind and solar generation in Brazil was curtailed due to grid congestion, resulting in economic losses estimated at BRL 6.5 billion . This stems from a geographic mismatch: abundant renewable resources are located in the Northeast, while major load centers are in the Southeast, with transmission infrastructure struggling to keep pace.
This bottleneck is having tangible effects. New large-scale solar additions in 2025 (10.6 GW) saw a 29% decline compared to 2024, and project financing has become more challenging due to revenue uncertainty from curtailment risks .
Looking Ahead: Infrastructure and Investment
To address these challenges, ANEEL has announced its first transmission line tender for 2026, which includes the construction of 859 km of new lines and 4,350 MVA of transformation capacity, an investment of approximately BRL 5.11 billion. However, with construction timelines estimated at 3.5 to 5 years, the immediate future will also rely on expanding energy storage and market reforms to stabilize the grid.
Meanwhile, the 25% import tariff on solar panels, introduced in mid-2025, continues to pressure project economics, contributing to a projected 7% contraction in installation growth for 2026 . As Brazil navigates these complex dynamics, the focus remains on modernizing grid infrastructure and refining market rules to sustain its leadership in renewable energy.
Sources: Brazilian National Electric Energy Agency (ANEEL), National Electric System Operator (ONS), Brazilian Photovoltaic Solar Energy Association (ABSolar), Ministry of Mines and Energy (MME).
