Spain reduces solar energy promotion by 40 per cent

As negotiations on Monday disclosed, this measure is to be brought about through a limitation in feed-in quantities as opposed to a sinking of tariffs. It means installations which were built under the generous feed-in law, Real Decreto 661/2007, can in the future only profit from up to 1,300 kilowatt hours per installed kilowatt on this tariff.

In the first reports from Europapress, however, the maximum quantity being mentioned is 1,200 kilowatt hours. Everything fed-in over this quantity will receive the market price.

Additionally, in the case of solar tracking systems, only 1,644 kilowatt hours can be calculated at the existing rate of remuneration in the future. The same rule applies to all new installations built under the current Real Decreto 1578/2008 in the coming years. This drastic measure is to apply for the coming three years and will reduce Spanish solar promotion – at the present time costing about €2.6 billion – by about 40 percent. This would mean a saving of €1 billion per year.

On the other hand, the Government is going to pass on the announced cuts of up to 45 percent on new installations. This is a somewhat academic concession as these will also no longer receive a guaranteed feed-in compensation in the future by production of 1,200 to 1,300 kilowatt hours. This means the reduction leads in the final analysis to the same overall result.

??The Spanish government is justifying this drastic move by saying that lower production quantities are estimated in the national energy plan PER (Plan de Energías Renovables) for 2005 – 2010. In fact, newer findings have apparently shown that actual production has been about 30 percent higher. For the Minister of Industry Miguel Sebastián, the only thinkable alternative to the planned reduction is a three year moratorium on new projects.

This is an option, according to Javier Anta, that is "pure negotiating rhetoric" and would cause "terrible damage" to photovoltaics. Spain’s photovoltaic associations have already registered a torrent of complaints against the planned law. Yet on July 1, Spain’s government is going to fly in the face of protests and present the planned law to the National Energy Commission. This is liable to raise objections: ones, however, of a non-binding nature. The Minister for Industry wants the new decree to become law in October.??