Brazil’s planned opening of its free electricity market to low-voltage consumers could require stronger credit assessment, liquidity management, regulatory oversight and consumer protection mechanisms, according to a study by energy market specialists Guilherme Susteras and Alexandre Bueno.

The study draws on a Wattio database covering 88,000 consumer units linked to 1,400 shared solar plants across the service areas of 40 electricity distributors between January 2025 and May 2026.

The researchers found an average monthly payment delinquency rate of 17% and monthly customer churn of 4%, potentially resulting in turnover equivalent to more than 40% of the customer base over a year.

The findings provide a reference point for assessing risks that could become more pronounced as Brazil expands access to its free electricity market.

Under the planned regulatory timetable, industrial and commercial consumers will be able to migrate to the free market from Nov. 25, 2027. Other consumers, including residential customers, will become eligible from Nov. 25, 2028.

The researchers said the expansion of the retail electricity market will require regulatory oversight to extend beyond monitoring the physical and energy balance of the system.

“It will not be enough to monitor only the system’s physical and energy balance. Issues such as working capital, liquidity, contractual robustness, credit assessment, anti-fraud mechanisms and commercial practices will become increasingly important for the sustainability of the retail market,” said Susteras.

The study found that a fragmented customer base does not eliminate payment delinquency risks. In a highly competitive market, significant levels of overdue payments could put pressure on electricity retailers’ cash flow and undermine their ability to meet financial obligations.

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