The lack of clear tax definitions for energy storage projects threatens to drive up costs for the 2026 capacity reserve auctions and increase expenses for the end consumer.
Brazil’s renewable energy sector is facing a race against time. With capacity reserve auctions focused on energy storage scheduled for December 2 and 4, 2026, the lack of specific regulations regarding access to the Special Incentive Regime for Infrastructure Development (Reidi) has generated a climate of uncertainty among investors.
The Brazilian Energy Storage Solutions Association (Absae) warns that, without proper clarification of tax rules prior to the bidding rounds, participants will be forced to raise their safety margins. In practice, this precaution could translate into higher bids, the additional costs of which would be fully passed on to Brazilian consumers through sector charges.
The cash flow bottleneck in investments
At the core of the issue is the time gap between paying taxes during the project implementation phase and subsequently recovering those amounts through tax credits. Although Law No. 15,269/2025 included energy storage systems (ESS) in Reidi, Decree No. 6,144/2007 has not yet been updated to operationalize this access, leaving a concerning regulatory vacuum.
The entity highlighted in a recent official letter sent to the Ministry of Mines and Energy (MME) and the Ministry of Finance:
The application of Reidi would reduce working capital requirements and could boost the competitiveness of projects.
Absae argues that, even with the exclusion of CBS and IBS from contracted fixed revenue, the financial cost of advancing tax payments on imported equipment and engineering services is a burden that disrupts the economic viability of these ventures.
Simulation reveals millionaire impact
To illustrate the severity of the scenario, the association conducted a projection based on a 2 GW investment, totaling around R$ 10 billion in capital expenditures. Considering current market rates and the timeframe for recovering tax credits, the estimate is that the additional financial cost just to cover advanced tax payments will reach R$ 36.4 million per project.
The concern is that this dynamic will repeat bottlenecks previously experienced in the distributed generation sector, where delays in the regulation of incentives forced companies to resort to the Judiciary. Aneel, which is scheduled to approve the bidding notices by the end of October, is under pressure to ensure that Reidi qualification is a clear reality for those intending to invest in the future of the national power matrix.
Market expectations are that the government will expedite the publication of complementary rules before the auction dates. Otherwise, the lack of parity in the tax assumptions adopted by each competitor could compromise the economic efficiency of the auctions and, consequently, the sustainable expansion of storage infrastructure in the country.
