Abstract
Energy transition presents new challenges in electricity regulation, notably Distributed Generation (DG) tariffs. In Brazil, DG capacity surged 18 times between 2021 and 2023. The impact of recent Brazilian DG legislation (Law 14300/2022; Normative Resolution 1059/2023) on the market remains uncertain. Our analysis, from technical, social, and financial perspectives, focusing on units with up to 5 MW of installed capacity, reveals persisting and increasingly unsustainable cross-subsidy schemes. While new rules mitigate the risk of a “utility death spiral,” misguided regulations may spur DG adoption and hike electricity tariffs. Revising subsidy regulations can mitigate adverse social and financial repercussions.
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