Brazil free electricity market: ACL opening creates a once-in-a-generation window

Brazil free electricity market: ACL opening creates a once‑in‑a‑generation window

Brazil free electricity market moves from bill to reality with MP 1.304/2025. Brazil free electricity market expansion lets every customer choose a supplier under a Supplier of Last Resort model.

On October 30, 2025, Brazil’s Senate approved MP 1.304/2025 to open the ACL (free market) to all classes: industry and commerce within two years, residential in three—now pending presidential sanction. Customers will be able to choose retailers with continuity safeguarded by a Supplier of Last Resort (ANEEL) framework. The addressable base is vast: ~89 million consumer units, demanding new retail models, dynamic pricing, and digital UX. 

Why this matters now. Competition among distributors and retailers will accelerate time‑of‑use and real‑time offers, a space where European leaders already operate. Brazil surpassed 210 GW of installed capacity in 2025, with renewables leading additions. Distributed solar (DG) crossed ~40 GW by end‑2024 and is tracking ~45 GW by end‑2025; DG alone is expected to add ~8.5 GW in 2025—low‑to‑mid‑20% YoY growth from a large base. Since 2019, DG has contributed ~43% of capacity additions. 

Market plumbing and governance. Wholesale operations are coordinated by CCEE; system operation by ONS; policy and planning by MME and EPE; and retail oversight by ANEEL. These institutions will shape rules for switching, billing, metering, and Supplier of Last Resort. 

What changes for households and SMEs. • Choice of supplier with transparent switching and no‑supply risk mitigated by Supplier of Last Resort. • Increasing availability of dynamic tariffs and green products (RECs/GOs). • Eligibility for demand‑response programs and bill credits from flexible use. • Better pairing of rooftop PV, batteries and heat pumps via Home Energy Management Systems (HEMS). 

HEMS, DER orchestration and grid software. As millions migrate to the free market, Matter, OCPP, OpenADR and DLMS/COSEM enable device and tariff integration so software can act—not just visualize. European HEMS and grid‑software firms can localize offers with ISO/IEC 27001 and GDPR‑style privacy while aligning with Brazilian regulation. 

Risk, bankability and consumer education. The reform sequence anticipates regulated Supplier of Last Resort to reduce churn risk and improve bankability of retail business cases. Consumer education will be key: simple comparisons, verified savings, and data export build trust. 

A useful historical parallel. Brazil’s telecom liberalization (1998) raised US$19B in the Telebrás auction (BNDES context) and drew global players such as Telefónica and Telecom Italia; sector CAPEX since privatization exceeds US$200B. Power liberalization arrives with a larger customer base, richer data, AI tools and more software leverage than 1998. 

Playbook for early movers (first 12 months). 1) Stand up a retail brand with CCEE processes and switching ops; 2) Launch dynamic tariffs with app‑based onboarding; 3) Bundle HEMS + rooftop PV + battery financing; 4) Run two flexibility events/month and publish three KPIs: R$/home saved (avg), kWh shifted (total), churn; 5) Localize cybersecurity and data governance to LGPD and ANEEL requirements. 

A continental market of 89M users, double‑digit PV growth, imminent choice and dynamic pricing, a greenfield of home batteries, and future peer‑to‑peer services set the stage. For European HEMS and grid‑software players, this is a near‑term window to scale solutions at city, utility and national levels—and help Brazil modernize how homes, buildings and SMEs use power. 

Brazil free electricity market: go‑to‑market priorities for Year One

Focus on dynamic tariffs, HEMS bundles, Supplier of Last Resort compliance, and measurable KPIs to earn trust and accelerate switching.