A systemic debt crisis is gripping Brazil’s rapidly expanding distributed solar generation (DG) sector, highlighted by the judicial recovery filing of one of the country’s largest players, the Pontal-Thopen Group. The crisis is estimated to involve over R$10 billion (approximately US$1.8 billion) in outstanding debt tied to at least 21 economic groups and 112 debt instruments, signaling a systemic risk for the nation’s private credit market. The Pontal-Thopen Group, which is controlled by Pontal Energy and manages a significant portfolio of solar and biogas projects, filed for court protection in August 2026, listing a total liability of R$4.56 billion (about US$820 million).