Brazil is the second-largest producer of hydroelectric power in the world, after only China, and hydropower accounted for more than 70% of the country’s electricity generation in 2018. Brazil’s latest 10-year energy plan seeks to maintain this level of hydro generation while increasing the share of nonhydro renewables, particularly solar.

Most of Brazil's hydroelectric plants are located in the country's Amazon River basin in the north, but Brazil's demand for electricity is mainly along the eastern coast, particularly in the southern portion. Reliance on hydropower for most of the country's electricity generation, combined with the distant and disparate locations of its demand centers, has presented electricity reliability challenges.

After a three-year drought in Brazil from 2012 to 2015, uncertainty about water supply led to increased diversification in more nonhydroelectric generation technologies. Natural gas consumption increased, but concerns about the availability of natural gas (Brazil currently consumes more natural gas than it produces) and increased CO2 emissions from fossil fuels in general have led energy policymakers to set higher targets for the development of nonhydro renewables.

As part of its 10-year energy expansion plan, Brazil expects nonhydro renewables to grow by about 3% per year and reach up to 28% of the domestic energy mix by 2027. The latest plan—Plano Decenal de Expansão de Energia (PDEE) 2027—focuses on a significantly increased expansion of solar photovoltaic (PV) capacity, while hydroelectricity capacity remains above 50%. The PDEE 2027 expects installed solar PV capacity to increase to 8.6 gigawatts (GW) by 2027, up from 2.5 GW in February 2019.