Spain reduces hours of subsidized sunlight

Surprisingly, Spain’s Council of Ministers has passed a new law that regulates the enormous tariff deficit, which Spain has accumulated during the last decade. The deficit encompasses the difference between the costs of electricity and the regulated electricity prices.

One of the measures to lower the deficit is to place a limit on the maximum number of hours PV power installations are subsidized for. According to the new Royal Decreto (RD) 14/2010, from December 23, the number of hours depends on the solar irradiation and climatic zone the PV system is located in.

The law divides Spain into five different zones, which are defined under another law, RD 314/2006. Consequently, for fixed PV installations, the maximum number of hours for receiving the FIT differs from 1,230 to 1,750 a year, depending on the zone. This differentiation will come into effect from 2014. Until 2013, the number of hours is limited more strictly to 1,250 hours for all installations that are registered under the RD 661/2007 and therefore for all PV systems that were installed after the end of September 2007.

By this means, the government expects to save PV subsides of €740 million a year through 2011, 2012 and 2013. As compensation, these plants will have the right to receive the FITs for three more years in the future – an extension from 25 to 28 subsidized years.

The new legislation has provoked harsh reactions among the Spanish renewable energy organisations. “The government provokes the ruin of thousands of private investors,” criticized the organisation of renewable producers APPA (Asociación de Productores de Energías Renovables). The association of solar entrepreneurs AEF (Asociación Empresarial Fotovoltaica) fears that the retroactive measures for operating plants will damage Spain’s position in the financial market to attract further investments.