The following letter, written by the Sustainable Favela Network’s Solar Working Group (the SFN is a project of Catalytic Communities), was submitted on December 30, 2019 in response to Public Consultation 25 of 2019, concerning a solar energy tax proposed by Brazil’s National Electric Energy Agency (ANEEL).
Contribution sent to ANEEL, in response to Public Consultation 25 of 2019, concerning a revision of Normative Resolution 482 of 2012.
The following institutions have signed the present document:
- Catalytic Communities (CatComm)/Sustainable Favela Network
- Revolusolar (in Babilônia and Chapéu Mangueira)
- Insolar (in Santa Marta)
- Engineers Without Borders – Rio de Janeiro
- Favelas Observatory
- Maré Development Networks (in Maré)
- Biá Artistic Productions
- Gol de Letra Foundation
- SER Alzira de Aleluia (in Vidigal)
- Solarize Treinamentos Profissionais Ltda.
- Beira Pica-Pau Community (in Cordovil)
- Indiana Tijuca Residents’ Commission
- ReciclAção (in Morro dos Prazeres)
- Movimento Papo Limpo (in Vila Parque da Cidade)
- Cine & Rock (in Rio das Pedras)
- Sepetiba Ecomuseum
- Catholic Church Pastoral Committee on the Environment
- EcoCasa Silvestre
- ADACI Brazil
- Camorim Quilombo
- Terra Una
- Environment in Movement Institute
- Horto Residents’ Association
- Horto Museum
- Upgrade Engenharia
- Engenhar Brasil Association
- Minhocário Arboreum
- Casa Museu Rancho Verde
- Catholic Church Pastoral Committee on Favelas
- Vale Encantado Cooperative
- Harmonicanto Music and Citizenship Association (in Cantagalo)
- RONGO (in Pavuna)
- Associação Social Beneficente Humanitária (in Vidigal)
- Onda Verde (in Nova Iguaçu)
- Favela Museum (in Cantagalo)
- Transvida Cooperative (in Complexo da Penha)
- SOS Jardim Gramacho Movement
- Association of Women with Attitude and Social Commitment (Amac)
- Lata Doida Cultural Group (in Realengo)
- Baía Viva Movement
ANEEL opened Public Consultation 25 of 2019, proposing changes in the regulation for distributed generation in Brazil. Below are commentaries contributed by various organizations that work with low-income populations in the area of social impact. The purpose of this document is to inform ANEEL about the unintended impacts of its proposal.
2. The Moment of Distributed Generation Dissemination
Like any technology, solar energy began its spread in Brazil with elevated prices. It was accessible only to pioneers with the capacity and will to invest in extremely long-term financial returns. The situation changed completely when prices began to decrease. Returns on investment fell, and banks began to offer facilitated credit: those who install solar energy today are able to pay the cost of installation with the saved value on their energy bills. Equity became unnecessary for those who were able to receive approval for lines of financing. Thus, it became possible for a large portion of the Brazilian population to have access to solar energy. The technology began to disseminate democratically around the country. The figure below shows the strong growth of very small installations, with power up to 3 Kilowatts.
3. Benefits of Distributed Generation
For households, the direct benefit of distributed generation is the reduction in energy costs and a subsequent increase in the net household income for the system owner. This is an addition which, certainly, will be spent on additional consumption in businesses and services in the vicinity, health measures, or housing improvements. The businesses that reduce their costs through solar energy can reduce the prices they charge to customers. In this manner, the financial benefit provided by solar energy installations is redistributed: what previously was revenue for energy distribution companies now circulates throughout the country’s economy, generating prosperity for businesses and new jobs in various sectors. Solar energy system installation itself generates jobs—up to 100,000 around the country. This is an important step in combatting unemployment, which remains high throughout Brazil.
4. The Impact of ANEEL’s Proposal on Families
In Distributed Generation, energy that is not utilized immediately is injected into the utility grid. It is this energy that would, under ANEEL’s proposal, be subject to sectorial charges of up to 63% of injected energy. In other words, only 37% of injected energy would actually be returned to the owner.
This proposal overtaxes families that, in large part, are absent from their homes when the sun generates energy, and thus, must re-inject the large part of the energy they generate. ANEEL does not justify why these families, in the future, should bear more of the cost from the energy sector than consumers who use the electricity immediately. A simulation of a system for a simple residence (with 3KW of power, and a concurrency factor of 30%) shows that the monthly savings could fall by 44% under the proposed rules. The new charges would equal R$1,338 (US$320) over a year—a significant decrease in household income.
The same burden will be applied to remote generation, which is how residents of apartments take advantage of clean energy. This is because, generally, they do not have space on their terraces and roofs to generate energy. Under the current proposal, remote generation will become inviable. We note a lack of analysis of the impacts of this regulation on different classes of consumers, and, for this reason, we consider the study incomplete and unfair.
5. Distributed Generation in Favelas
A series of pilot projects are introducing distributed solar generation in Rio de Janeiro favelas. These projects have various objectives:
- Cost reduction for community institutions to guarantee their survival;
- Training residents to enter the new job market;
- Reduction of energy costs for businesses and local residents;
- Regulation of the distribution network connection;
- Reduction of technical and non-technical losses in communities.
The application of generated distribution, although incipient, has already seen positive results in favela communities. Thus, generated distribution has begun to expand—but these gains will be drastically impacted if ANEEL makes the proposed charges a reality.
6. Distributed Generation Projects in Favelas
Below, several different organizations briefly describe projects involving distributed generation in Rio de Janeiro favelas and the impact of the proposed rules.
6.1 The Sustainable Favela Network
Organization: Catalytic Communities (CatComm)*
Area: Rio de Janeiro Metropolitan Area
The Sustainable Favela Network (SFN) is a network of more than 800 participants and hundreds of favela-based sustainability projects that develop and promote sustainable practices in Rio de Janeiro’s favelas, as well as technical allies that support these initiatives.
The SFN is organized into seven working groups that have emerged because of community demand, including a 39-member Solar Energy working group. In 2019, this working group was the most active within the network, with its members acting proactively in the processes of spreading and achieving solar energy in the communities of Rio.
A survey was conducted at the end of 2019 across the network regarding the demands of community projects for future actions. Of the SFN community-based initiatives with their own headquarters, 85% said they would like to install solar panels and become ambassadors for solar energy within their communities. This was the highest rate among sustainable technology options in the survey.
These projects hail from various corners of the city, including Vila Parque da Cidade, City of God, Pavuna, São João de Meriti, Salgueiro, Camorim, Sepetiba, Cantagalo, Vidigal, and more. What we have seen in building the SFN is an incredible demand among Rio’s communities for sustainable, localized, and low-cost solutions to their various challenges. Imagine a network of community projects, from museums to gardens to preschools, all with solar panels and acting as ambassadors for this venture around the city? This is the objective of the SFN Solar Working Group.
6.2 Revolusolar—Sustainable development in favelas through solar energy
Area: Rio de Janeiro, Morro do Leme (favelas of Babilônia and Chapéu Mangueira)
Since 2016, Revolusolar has acted in these territories, undertaking solar energy installations, professional training courses, and educational activities. One example is its installation in the Escolinha Tia Percilia, which is a traditional after school tutoring institution in the community that acts as a complement to public school.
The school depends on local volunteer work and had a period of financial difficulties, especially in regard to its electric bills. The solar energy system and consequent reduction in utility charges allowed the school to continue providing quality educational activities for local children. Beyond highlighting the economic benefits lost by future beneficiaries of favela installations as a result of the intended regulatory changes, we also emphasize the potential impacts of reducing non-technical losses (a latent problem in the favelas of Rio de Janeiro).
Finally, we request firm action from ANEEL regarding the local distributor (Light), which is not adequately serving this region, in violation of the Agency’s guidelines. Distributor employees justify connection and technical visit delays using the argument that these communities are risky areas, even though two Pacifying Police Units (UPPS) have ensured security since 2009, and utility employees are seen every day in the community removing informal network connections.
6.3 Insolar—for more solar communities
Summary: Insolar is a social business that focuses on the combination of technology, energy, knowledge, and opportunity as the main tools to allow communities with potential to develop their entrepreneurial talents, thus fortifying local and national economies.
Priority: One of Insolar’s principal areas of action is Insolar Communities, which seeks to promote the adoption of photovoltaic technology in urban communities through sustainable business models and maximize the technology’s economic, social, and environmental benefits.
Strategy: Insolar dialogues with different actors in the energy sector, emphasizing commonalities and securing the best result possible for all parties involved.
Whether they are consumers, suppliers, or distributors of energy, the dialogue and construction of intersectoral solutions have been the message of Insolar from its pilot project to its democratization strategy.
Benefits: From the perspective of the electric sector, some positive impacts of Insolar Communities’ work are:
- Capacity-building and income generation: Capacity building compatible with the needs and requirements of the job market in the energy sector contributes to increases in household income and allows beneficiaries to meet their financial obligations—including energy bills, one of the key items on household budgets in urban communities (for example, energy was the third largest expense in the Santa Marta favela in Rio de Janeiro, in August 2016);
- Technological accessibility: adherence to micro-generation of solar energy with a lower monthly cost than the energy savings generated by the photovoltaic system allows beneficiaries, especially entrepreneurs, to acquire the technology, and at the same time, reduce their energy bills. This reduces the defaults of residents in these communities to energy distributors;
- Participatory innovation: The engagement of segments of society most directly impacted by the great challenges of the national electricity sector contributes to the search for solutions that are more dynamic, innovative, and assertive.
Challenges: The expansion of photovoltaic technology in Brazil still reflects major challenges for urban communities, including:
- The precarious nature of electrical installations
- Low rates of financial inclusion
- Challenges in accessing adequate credit
- Informality of economic activities
- Organization of housing growth
- Short-term culture that prioritizes urgent necessities
- Territorial vulnerability to political, economic, social, and environmental changes
Opportunities: Still, these challenges do not preclude the adoption of photovoltaic technology as one of the main tools for the electricity sector to address its greatest challenges. Rather, they underscore the importance of preserving this tool, keeping it protected from any form of taxation and stimulated through new business models, credit access, subsidies, exemptions, and all other possible forms of stimuli that allow these communities to thrive.
In partnership with a large public bank, the private sector, other sectoral organizations, and above all, residents and local leaders, Insolar has carried out and planned installations in 15 communities in Rio de Janeiro, as well as projects in São Paulo and other important cities and capitals throughout the country, always in collaboration with large companies in the energy sector.
Conclusion: Welcoming innovation, in addition to being essential for avoiding technological obsolescence in the electric sector, is fundamental for the development of new business models essential to the future health of the sector. While a micro-entrepreneur in a Rio favela depends on affordable energy for the success of his or her business, energy distributors depend on the economic prosperity of many micro-entrepreneurs. Both want their businesses to prosper, and Insolar believes that all can prosper together.
Recommendation: In spite of the understanding that the advancement of solar technology ought to be promoted in all sectors and segments of Brazilian society, we know that low-income communities deserve special attention, considering that:
- The energy challenges of these territories are already known by ANEEL, but are still poorly understood owing to their systemic complexity and contextual peculiarities;
- Photovoltaic projects in these communities are still in experimental stages; and
- Technology can still prove to be a solution to major challenges in the Brazilian electric sector.
Thus, we recommend:
- The suspension of all initiatives that may disincentivize the advancement of photovoltaic technology in low-income communities throughout Brazil;
- A convergence of efforts and resources in the electric sector towards the search for sustainable solutions to communities’ energy challenges;
- The establishment of an intersectoral working group to discuss possible alternatives for energy challenges nationally, especially in urban communities.
Recognition: Insolar congratulates ANEEL for its role in regulatory discussions on the advancement of technology and for the opening, through public hearings, of a space for the topic to be discussed; and for promoting Energy Efficiency and Research and Development projects focused on urban communities in partnership with major energy distributors. Above all, we are convinced that we can trust the leadership of ANEEL to provide favorable conditions for the photovoltaic energy market to develop with an equilibrium between agents and to the benefit of society, and especially for communities of high potential.
6.4 Engineers Without Borders—Rio de Janeiro chapter
Organization: Engineers Without Borders—Rio de Janeiro chapter
Area: Rio de Janeiro
Sustainable Shelter Project
Engineers Without Borders-Rio de Janeiro (ESF-Rio) aims to install sustainable systems such as photovoltaic energy and rainwater capture systems in shelters that are spread throughout Rio de Janeiro, for children, the elderly, those who are substance dependent, and others. Many of these shelters suffer from maintenance challenges, and one of the largest challenges is astronomical electric and water bills stemming from the high number of people living in these spaces.
In addition to the social and economic benefits, there are environmental impacts generated by the installation of solar systems. The economic benefits generated by the project are returned directly through projects that benefit the residents of the shelter. Thus, ESF-Rio proposes accelerated utilization of sustainable systems, especially in underprivileged environments that demand reduced costs.
Four shelters currently benefit from such systems, directly and indirectly impacting more than 3,000 people.
The Sustainable Education Project
This ESF-Rio project seeks to offer vulnerable youth the opportunity to have more contact with sustainable engineering systems. A Photovoltaic Solar Energy laboratory was built and now provides practical classes on sustainable electric energy systems. Electric energy today is an important factor for local human development, and generating knowledge around sustainable energy generation methods is crucial in educating citizens to increase environmental awareness in their daily activities.
A curriculum was prepared for an educational program in sustainability, focused on rainwater harvesting and the installation of a photovoltaic solar energy system. The practical and theoretical basis of sustainability is already part of the required curriculum in youth education systems in countries all over the world.
In Brazil, with poor access to quality public education, young people are subject to an extremely weak level of teaching, especially in low-income communities and the peripheries. Continuous education has come about as a clear alternative for changing the reality of such youth.
- Contribute to the transformation of social and/or environmental conditions of communities and groups;
- Strengthen sustainable and inclusive production processes, with income generation;
- Strengthen training and education processes
The first edition of the project directly and indirectly impacted 300 people.
6.5 Favelas Observatory—Shared generation with the Espaço Bela Maré
Organization: Observatório de Favelas (Favelas Observatory)
Area: Complexo da Maré
Since 2017, the Bela Maré art space has depended on a 16 kWp solar energy system. The space belongs to the Favelas Observatory, whose headquarters is two blocks from Bela Maré. The surplus energy generated is shared with the Observatory.
Under the proposed rules, shared energy will be subject to new charges. These charges can reach more than R$7,000 (US$1,680) per year, a price that will definitely create financial difficulties for the professional education projects that the Observatory runs. We request that ANEEL abstain from imposing these charges on shared energy.
6.6 Maré Development Networks—Women’s House
Organization: Redes da Maré (Maré Development Networks)
Area: 16 favelas of Maré
Redes maintains a culinary training program for women at its Women’s House (Casa das Mulheres) space. The installation of a photovoltaic system at the site is currently being planned, and the organization intends to increase the number of vacancies in the program as a result of expected cost reductions.
The taxation proposed by ANEEL would reduce this beneficial effect (the cost reductions) for the local population.
The Casa das Mulheres is a space designed by Redes da Maré to promote the positive roles of women in the region, thus contributing to the improvement of the lives of these women and, consequently, all those around them. This is a question of realization and recognition of the role of women in the emergence of social movements and infrastructure-related struggles in Maré since the 1980s.
The group of favelas that make up Maré, like several territories with the same profile, lacks public policies for sustainability and a greater understanding of the various forms of electricity generation.
The search for sustainable development with alternatives that stimulate economic growth but that also have little or no environmental impact is directly linked to solar photovoltaic energy. With this in mind, we view solar energy as a strong and powerful driver in the territorial development of Maré.
Solar energy also drives us toward better interaction between man, nature, and new environmental perspectives. We have excellent solar potential in Maré, and this is facilitating local participation in the construction of a new dialogue around energy, one that has strong socio-environmental, economic, and sustainable development impacts.
6.7 Libertarian School of Arts (ELA)
Organization: Biá Artistic Productions
Area: Complexo da Maré (with possible expansion to other communities)
ELA has a small photovoltaic system that produces, independently and free of charge, energy for the school’s artistic and educational tasks (projectors, lights, fans, refrigerators, sound, etc.). The solar panel also generates debates on sustainability and the empowerment of residents of the peripheries regarding photovoltaic technologies.
In two months of existence, ELA has already served around 300 people, operating once a week. It intends to further expand its operations in 2020.
6.8 Gol de Letra Foundation—Education for Children and Youth
Organization: Gol de Letra Foundation
Area: Caju, Rio de Janeiro and 11 different sites in Brazil and Guinea-Bissau
The Gol de Letra Foundation is a non-profit civil society organization that was born of the dream of Brazil’s fourth-time World Cup win champions Raí de Oliveira and Leonardo Araújo to contribute to the education of children and young people in socially vulnerable communities, giving them greater opportunities and broader life perspectives.
The Foundation also invests resources in systematizing its practices and methodologies and, through dissemination, seeks to expand the scope of its work by sharing its social technology with professionals and organizations from other areas.
Responsible for the development of actions focusing on families and communities in the Caju neighborhood, one of the neighborhoods with the lowest Human Development Index (HDI) numbers in the municipality of Rio de Janeiro, the project operates transversally and is interconnected to all of the other projects developed by the Gol de Letra Foundation in the region. The focus is on inter-institutional dialogue, as well as discussions with residents, in addition to the strengthening of local social assistance networks.
The foundation maintains a school in the neighborhood that has a photovoltaic system that contributes substantially to reducing costs. Currently, all energy generated by the solar system is harnessed to reduce the energy bill. Under ANEEL’s proposal, only 37% of the energy generated during non-school hours could be harnessed—a reduction that will force us to reduce activities that are beneficial to society.
This program fits into Sustainable Development Goals (SDGs) 3, 4, 5, 10, and 16.
Personal and Professional Development
The Gol de Letra Foundation understands that the role of an organization working in communities of high socioeconomic vulnerability is to offer the youth and adolescent population various possibilities and opportunities through knowledge, practices, experiences, and dialogue. That is, to promote activities that meet their educational, formative, and social needs, expand their educational and cultural repertoire, strengthen their autonomy, and prepare them to exercise their citizenship.
Thus, for youth, Gol de Letra’s work is divided into three main axes: Employability, Training of Monitors, and Art and Communication. These are the themes of action for Gol de Letra’s programs and projects aimed at young people, achieved through vocational and qualification courses; training of multiplying agents; employability and life project workshops; and artistic language workshops.
Thus, we seek to embrace different interests and demands of young people in relation to their education, professional position, income generation, personal and household organization and, above all, to foster favorable conditions for their holistic development.
“We made a contribution of solar panels here in Rio de Janeiro, to the Gol de Letra Foundation. For us as employees, it is a pleasure to represent the company and to know that it always cares about social and environmental issues.”—Alfredo Poblador, Industrial Director of EDF Norte Fluminense Thermoelectric Plant.
6.9 SER Alzira de Aleluia—Vidigal
Entity: SER Alzira de Aleluia
SER Alzira de Aleluia is a non-profit community organization whose mission is to work alongside the Vidigal community, promoting citizenship and providing educational, sports, and cultural practices in Vidigal, as well as promoting spaces for reflection, independence and, autonomy. Its motto is SER: Serve, Educate, and Renew.
SER Alzira carried out a survey on the potential of installing solar panels at its headquarters and intends to carry out this project with the objective of generating energy on a small scale as a way to develop social technology. It is also in favor of public policies that stimulate sustainable energy to reduce clandestine energy connections in the community, and promotes environmental education to integrate the community with solar energy technology.
6.10 Solarize Training—Consulting and Empowerment
Entity: Solarize Training Professionals Ltd.
Area: Brazil, with a focus in Rio de Janeiro
Solarize has supported diverse social initiatives since 2012 through continuous action. Examples include:
- Training of professionals in solar energy installation, offering a number of scholarships;
- Consulting services for the development of solar energy projects in youth shelters, cultural centers, and community initiatives;
- Provision of teaching materials for training courses;
- Mediation with industry and businesses in order to obtain donations for a training center for community residents.
We realize the enormous potential of solar energy for low-income populations, as well as the severe impacts of ANEEL’s proposal on these projects, as described in this document.
7. Conclusion and Recommendation
The projects summarized above show the enormous potential of distributed generation of solar energy for disadvantaged populations. It generates a multifold benefit in underserved areas. The justification for instating charges on injected energy comes from an alleged harm that distributed generation causes in society. We are unable to see such harm and thus do not find the justification for the new charges to be convincing.
The effect of the proposed charges will result in a significant reduction in the benefits of solar energy, and will delay the dissemination of solar energy among less privileged communities. For these reasons, we ask ANEEL to postpone instating the charges in order to first study the benefits to society more broadly and to create a plan that respects a balance among actors in the electric sector, which we all are.