Present in 30 municipalities in the state of Rio de Janeiro, the energy technology company Reverde is extending its solar energy contracting services to the state of Minas Gerais and is also targeting companies in São Paulo and Alagoas.
The goal of the Brazilian company, created in April, is to simplify the use of a cleaner and cheaper source of energy for consumers of all sizes through the distributed generation model.
CEO Felipe Mattos told BNamericas Reverde’s goal is to end 2022 with around 1,000 customers, up from around 200 today.
In this interview, he explains how Reverde’s business works and comments on the outlook for the local distributed generation market.
BNamericas: How does Reverde’s business work? Can any consumer subscribe to your services, regardless of their level of consumption?
mattos: Brazil is starting to allow small consumers to choose their energy suppliers through distributed generation. We were therefore born with this objective: to help millions of Brazilians to have the possibility of consuming clean and cheaper energy.
If I live in a house, I can put a solar system on my roof and use less electricity from the utility. But this system works during the day, and putting a battery to have electricity at night is not cheap. Thus, a credit and debit system has been set up, to combine your energy with the power consumed by the public service.
A farm or ranch can also do this, but will face higher costs for installing and maintaining the equipment.
What Reverde does is lease solar power plants and allocate that credit to consumers, who won’t have to deal with installation and maintenance costs or worry about taking out insurance for the equipment, for example. This is valid for any consumer, including those who live in a rented apartment. We only accept social rates [applied to low-income consumers]because they are too low, too subsidized by the government.
BNamericas: Are the solar power plants then rented?
mattos: Yes, we are looking for factories under construction to partner with their owners, who do not want to get involved in the marketing activity.
BNamericas: Today, many solar projects are being developed in the country.
mattos: Yes, it’s amazing. Large to medium and small groups. And these entrepreneurs are getting great returns. It’s a great adventure, even for small and medium investors.
Solar generation is more modular, you can do smaller projects and you don’t have to go to the capital market, for example. Everyone consumes energy, so the investor can hedge against inflation.
BNamericas: In addition to acquiring clean energy, do your customers tend to obtain economic benefits? Why?
mattos: What moves customers the most is the discount. Expenses with fixed bills, such as gas, electricity, telephone and electricity represent 9% of the average income of the Brazilian and represent half of the bills. It is a heavy burden for Brazilians. At Reverde, we are paid by the owners of solar power plants, not by the customers. It’s a case similar to Booking.com, which identifies empty hotels and finds customers for them. We do the same with solar energy.
The Brazilian electrical system is formed by several factories with different levels of efficiency, and when you are billed, you pay for everything, including existing inefficiencies, because many factories have old technologies, in addition cats [illegal power connections]projects with politico-electoral prejudices, etc. With Reverde, we are talking about new power plants, with solar panels in a country with very high solar incidence.
BNamericas: Could this scenario change with the progressive taxation of distributed generation from 2023?
mattos: There will be a natural market accommodation. We believe that in the future, the consumer will have the power to choose his energy supplier. Whatever the regulatory instrument, we want to be the reference brand in energy. Use energy for good, to improve the world, with simplicity and transparency.
Shared production will suffer the effects of this change, but I think it’s healthy, because there has to be a harmonious coexistence with distributors. In any case, the projects will continue. There will be a decrease, but that’s not necessarily bad. There is a huge queue of distributed generation projects requesting access to distributors. And the channel is tending to become more professional. Today, with such a high return, there are many adventurers, for better or for worse, as in any race, such as the gold rush, the coffee rush or the sugar rush that we experienced in Brazil .
Editor’s note: The DG’s regulatory framework was approved in January. Under the new law, the current rules for holders of micro and mini generation units already connected will be maintained until December 2045, without fees or tariffs, as for the use of the distribution network.
This will also be valid for new installations implemented in the first year of the law, i.e. until January 5, 2023.
After that, distributed generation units that enter the system will be subject to the progressive application of the royalty over six years, until they reach the full amount in 2028.
BNamericas: How many solar power plants does Reverde currently rent? Where are they and what is their installed capacity?
mattos: Today, we have seven micro-power plants in Rio and Minas Gerais, with a total installed capacity of around 1 MWp, serving around 200 customers. Our goal is to end the year with around a thousand customers.
BNamericas: Do you plan to expand your portfolio of solar power plants? What states are you considering apart from Rio de Janeiro and Minas Gerais?
mattos: We look very carefully inside São Paulo, in order to serve Paulista CPFL. Alagoas is also on our radar.
BNamericas: Are you looking for commercial and/or financial partners?
mattos: We are closing a round of financing. As for commercial partnerships, our model operates in a network. People interested in the business and using their local influence to attract new customers. Today, we have about thirty business partners. And we are now partnering with a major chain of pet stores to offer discounts in their stores and on our services.