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Brazil’s new curtailment rules unlikely to revive utility-scale solar investment

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Brazil’s new curtailment rules unlikely to revive utility-scale solar investment

Large-scale solar developers in Brazil have received two updates on past and future generation curtailment. Curtailment rates of around 25%, combined with uncertainty over compensation, have frequently been cited as reasons for developers to surrender project authorizations. While the new curtailment rules offer greater certainty and predictability, a recovery in investment will depend on other factors.

In 2026 alone, developers surrendered authorizations for 923 solar projects in Brazil, representing more than 40.6 GW of capacity and BRL 134 billion ($26.3 billion) in lost investment, according to a study by the Brazilian Solar Photovoltaic Energy Association (ABsolar). The association said the figures show that curtailment, along with the lack of clear criteria for classifying curtailed energy and determining compensation, has become a decisive factor in investment decisions, even in regions with little history of curtailment.

The pace of authorization cancellations has accelerated since 2025, shrinking the pipeline of projects available for future capacity expansion. Data from Brazilian electricity regulator Aneel show that 2,492 power plants, with a combined potential capacity of 110 GW, held authorizations in January 2026. That figure has since fallen to 60 GW.

Solar generation curtailment reached an average of 1.4 GW in 2026, equivalent to 25.3% of total solar generation during the period. The volume of curtailed electricity is already approaching the total recorded for the whole of 2025.

The risk of curtailment and uncertainty over compensation have brought investment in new utility-scale solar projects to a standstill. In July, Brazil’s Ministry of Mines and Energy issued Ordinance 140, establishing compensation rules for curtailment between Sept.


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