Photovoltaic energy generation in Brazil – Cost analysis using coal-fired power plants as comparison

We make a brief analysis of the evolution of photovoltaic systems, highlighting the present situation worldwide and in Brazil. We compare costs of energy generation associated to photovoltaic and to coal-fired power plants. Coal-fired generation represents the eligible choice for the Brazilian State of Rio Grande do Sul, where thermal plants may use locally extracted coal. The production cost of the energy generated with coal is evaluated taking in account the effect of the invisible cost represented by externalities that affect human health. The price evolution of Photovoltaic modules is presented, as well as trends on decreasing costs for new installations. We also calculate the production cost of the AC energy generated by three photovoltaic plants, with different power, derived from a model. The model is used to make sensitive analysis based on the adjustment of some factors that directly affect Brazilian costs such as: insolation, module's custom and transportation taxes, effect of economy of scale, cost of money. A cost comparison is made between the two technologies and some government incentives are proposed to narrow the existing financial gap.

► We highlight the secondary health effects of coal, used for electricity generation.
► We present PV as clean, decentralized, faster alternative to coal power plants.
► The cost of PV electricity is lower than coal and trending toward grid parity.
► The PV electricity in Brazil is mainly affected by import taxes and cost of money.
► An FIT program is presented, resulting from sensitivity analysis of taxes and ROI.