Portugal: Solar industry fears IMF’s decision

The Portuguese Solar Industry Association (APIS, Associação Portuguesa da Indústria Solar) sees this as a major threat to the survival of the industry. Portal Ambiente quoted president Maria João Rodrigues as saying: "the solar energy industry cannot survive without governmental support."

However, she believes that the reduction of subsidies for the production of electricity from renewable sources recommended by the Troika "provides some room for different interpretations," Renascença reported.

"What we can read [from the report] is that there is a will to negotiate tariffs, but these tariffs concern large plants in Portugal and not regimes such as micro-generation and mini-generation, which truly boost the national market and sector," she stated further.

The changes to the VAT rates to be applied in the sector lead to other questions, such as "how will these products be taxed," Rodrigues said. "I don’t believe they are explicitly removing support to this type of renewable energy and applications. There is plenty of room for dialogue," she explained.

A more positive outlook

The Secretary of State for the Environment is more positive about the report and believes it can actually lead to further environmental sustainability in the country, which could have a positive impact on the photovoltaics industry.

"I have not seen in the package negotiated [between the government and the Troika] any factors of non-sustainability [in terms of the environment] and there are even some factors which, despite the difficulties they pose, could induce sustainability," Humberto Rosa told Público.

For the Secretary of State, the increase in gas and electricity prices proposed by the EU-ICB-IMF group also represents "a great opportunity for small investment in energy efficiency". He believes the reduction of subsidies could lead to further investment in emerging forms of production.

"As wind power becomes more robust, we should turn and channel this support we get from the tariffs towards solar energy, which is, in my opinion, the one Portugal has the most potential and future with," he continued.

More investment

The Troika’s decision to implement further cuts on tariffs comes at a time when investment in photovoltaics seems to be becoming stronger in Portugal. This week alone, IBC Solar announced the reinforcement of its position in Portugal and considered it to be "a strategic market" due to its enormous potential in the renewable energy sector and for its obvious links to Angola, Brazil and Mozambique, Greensavers reports.

"Through our presence in Portugal, we want to reach Brazil, and create links between Portugal, Angola and Brazil," said Juan Manuel Presa, country manager at IBC for Portugal. In 2011 alone, the company expects to bank between €6 million and €7 million in Portugal, 20 percent more than in 2010.

Recognizing the need for further investment in the industry, other initiatives have appeared to boost the development of the sector. For example, the University of Évora (UE, Universidade de Évora) recently announced its intention to create the Portuguese Solar Energy Institute (IPES, Instituto Português de Energia Solar), an interface between the institution and companies in the sector, with the purpose to develop technology and knowledge that can be made available to the companies, Ciência Hoje reported.

The report

The EU finance ministers have approved the bailout – €78 million – on May 16, which requires the country to implement the austerity measures that had been rejected in March by the Parliament.

These include cuts on state spending by 3.4 percent of the GDP and an increase in government revenue. One third of the bailout will be provided by the IMF, while another third will come from the EU budget. The remaining money will come from the €440 billion Eurozone rescue fund.