Critics have blasted the Balbina dam, located near the Equator some 200 kilometres north of the city of Manaus, as an environmental crime.
The dam, which flooded some 2,400 square kilometres of rainforest, was ordered built at great expense during Brazil's 1964-1985 military regime.
But when it comes to generating electricity, the dam is a bust: the Balbina hydroelectric plant, inaugurated in 1989 after a decade of work, currently produces a mere fifth of its maximum output of 250mW.
"This is one of the biggest environmental crimes that engineering has committed in this country," says energy and mining minister, Eduardo Braga.
"How can we mitigate the cost of this crime? By improving the cost-benefit relationship of this power station," he says.
Floating solar panels are not new, but using them on a hydroelectric dam's artificial lake is novel.
This hybrid system uses the existing - and underutilised - power transmission infrastructure, as well as the flat water surface for the panels with no need to buy or expropriate new land.
Brazil gets 60% of its electricity from hydroelectric power plants.
But much of the country, including in the Amazon rainforest area, has been enduring a severe drought. Water levels at many Brazilian dams have dropped to dangerously low levels.
The Balbina pilot project, to be completed by 2017, is a large platform with 50,000 square metres of solar panels, about the size of five football fields.
The panels can produce five megawatts of electricity, enough to supply some 9,000 homes with power.
Engineers hope to increase the output to 300 mW, allowing Balbina to produce electricity for 540,000 homes.
"We're going to transform the hydroelectric power generators, that have limitations due to the weather, into unlimited power producers because they will also use solar energy," says Orestes Goncalves, president of Sunlution.
His company partnered with French firm Ciel et Terre to install the panels at Balbina.
The engineers have not said how much cheaper electricity could be for local residents, but one of the project's long term goals is to bring down utility prices
Separately, engineers will measure the efficiency of this hybrid model with floating solar panels at two very different locations: at Balbina, where the rainforest weather is hot and humid, and at a dam in the hills of the semi-arid north-eastern state of Bahia.
If successful, officials hope to expand the floating panel system via public tenders.
