The downturn stems primarily from forced generation curtailment, a procedure in which the national grid operator orders renewable plants to reduce output when solar or wind production exceeds demand and transmission capacity. These interruptions, known as curtailment, diminish project revenues and have escalated in frequency. Between January and August 2026, curtailed generation reached approximately 4,122 average megawatts, up from 3,429 MW in the same period of 2025, according to data from the National Electric System Operator compiled by sector analysts.
Wind capacity additions dropped by half, from 4 GW in 2024 to 2 GW in 2025, with projections indicating only 0.4 GW in 2027. Large-scale solar projects added 3 GW, down from 7 GW, while distributed generation installations on rooftops and commercial sites slowed to 12 GW from 13 GW as incentive programs were scaled back. Rafael Rabioglio, BloombergNEF’s Latin America lead, attributed the slowdown to regulatory uncertainty over curtailment compensation and low project economics, stating that discussions of pure solar or wind projects without storage have diminished.
Investor attention is shifting toward energy storage as a prerequisite for new development. BloombergNEF forecasts Brazil’s battery storage capacity will exceed 1 GW by 2028, driven initially by commercial and industrial installations before the December battery auction launches utility-scale deployment. The Bárbara Rubim, president of the Brazilian Solar Association, said the data confirms the sector’s warnings that Brazil has not lost solar resources or technological competitiveness but has lost regulatory predictability. Industry representatives argue that without clearer price signals and faster adaptation of transmission infrastructure, the country risks prolonged underinvestment despite abundant renewable resources.
This article was curated and published as part of our South American energy market coverage.
