Distributed energy resources in low-income communities: A public policy proposal for Brazil

Low-income communities in developing countries have difficulty in meeting their electricity payment obligations. The Brazilian government, committed to achieving energy justice, has implemented policies such as social electricity tariff (TSEE) and offered subsidies on energy bills to low-income consumers. This same government introduced a subsidy policy to spread the distributed energy resources (DER), especially Solar Photovoltaic (PV), allowing consumers to reduce their spending on electricity bills. However, it is essential to highlight PV panels are predominantly accessible to more wealthy people, excluding the low-income population. Merely providing social tariffs for low-income electricity consumers may not solve the problem of electricity default bills in low-income families. This study evaluates the economic feasibility of a policy to replace the existing TSEE in Brazil with a solar PV policy for low-income consumers. A methodology to identify the municipalities where poor consumers have income gains was implemented, considering the deployment of PV behind-the-meter or in centralized power plants. Besides, some critical variables were mapped. The results suggest that behind-the-meter PV brings more income gains for low-income consumers than centralized power plants. Considering the country's diversity and complexity, a combination of TSEE and PV policies for low-income families would be more appropriate. •Subsidized tariffs should be aligned with Distributed Energy Resources policies.•The model must consider geographic issues, electricity consumption, and income.•Behind-the-meter PV presents better results than the power plant deployment.•Integrating subsidized tariffs with DER maximizes benefits for the impoverished.•Aligning DER with subsidized tariffs may reduce subsidies for other consumers.