Expansion of the Supply of Solar Energy and Cost Cutting of Housing Programs for Low-Income and Middle Class Families

Abstract

The purpose of this article was to create a proposal to reconcile two public policy objectives: to provide housing for low-income families (through the expansion of the Minha Casa, Minha Vida (My Home, My Life) Program) with reduction of costs, and to expand the supply of renewable (solar) energy to dilute the harmful effects on the environment of the excessive use of energy from hydroelectric and thermal sources. The idea is not new, as similar programs already exist in Germany that invests heavily in solar power. What is encouraging is the amplitude of solar power generation that can be achieved in Brazil. Solar energy accounts for 40% of the global energy mix as opposed to Brazil’s share of 0.01%, showing enormous potential for expansion, as we are blessed with considerable year-round solar energy, unlike countries with very unstable weather conditions. We show that the cost to install solar panels and batteries for a low-income three-member family with the sale of surplus energy to a power distribution concessionaire represents an approximate increase of R$ 48,000 on the total amount that they already pay for their home loan. However, these families will actually pay around 40% of the funding, as the balance is deducted from the surplus value generated by the photovoltaic system. The total generation of solar energy would reach 164TWh with this program — today it is 11MW —, climbing steeply from a 0.01% share in the composition of the mix to over 31% of the national power generation. This proposal also provides an increase in the disposable income of families participating in housing programs and reduces the subsidy for housing programs.