Spanish PV producers receive $2.6 billion in compensation as industry faces doom

The total value of regulated compensation for photovoltaic solar generation paid out to eligible photovoltaic solar generators in Spain amounted to €1.96 billion ($2.6 billion) in the first seven months of 2013, down 5.43% from €2.07 ($2.74 billion) billion in the same period a year ago.

Spain’s energy regulator, the National Energy Commission (CNE), settled payments to 60,469 photovoltaic electricity generators for 5,023 GWh of electricity sold in the first seven months of this year, down 3.72% from 5,210 GWh in the same period in 2012.

The number of solar installations that benefited from compensation payments went up from 58,421 to 60,469, according to CNE’s monthly reports from July 2012 and July 2013, respectively. The net photovoltaic capacity that CNE settled payments for amounted to 4,626 MW in July 2013, up 7.58% from 4,300 MW in July 2012.

The average premium for photovoltaic generators in the first seven months of 2013 totaled €0.388 per kWh, down from €0.3995 per kWh between January and July 2012.

The volume of premiums settled to photovoltaic generators in July 2013 totaled €360.18 million, down from €362.72 million in July 2012.

The overall volume of monthly premiums is expected to fall significantly in the next few months as a consequence of the application of annual limits enforced by legislation that established urgent measures to correct the tariff deficit in Spain’s electricity sector in 2010.

The law, Royal Decree?Law 14/2010, sets the annual ceiling value for photovoltaic generation premiums at 1,250 hours for fixed installations and 2,367 hours for fixed installations with two-axis tracking. From the moment these limits are reached, the solar generation plants are eligible to receive only the electricity market price.

Total payable premiums plummeted from €307 million in August 2012 to €121 million in September 2012 as a consequence of the application of annual limits enforced by the law.

Making matters more difficult for PV generators, Spain’s energy ministry recently submitted to the CNE a draft version of a controversial Royal Decree that regulates conditions for electrical power consumption and production by consumers who generate electricity themselves.

‘The draft version will prevent the development of energy saving and efficiency practices very beneficial for consumers and for the whole country,’ warned the Spanish Photovoltaic Union (UNEF).

The problem is that Spain’s small-scale photovoltaic market will be deliberately targeted through the creation of new electricity fees for power generated by solar panels, thus transforming self-consumption to the point of making it more costly than conventional power supply.

UNEF warned that the ministry proposal would stop the new small-scale market in its tracks, by introducing a new ‘support toll’ payable on energy that is self-consumed instantaneously. ‘To give an example, this would be equivalent to charging a consumer for lighting up a wooden stove and switching of the radiators,’ UNEF explained in a statement.

UNEF argues that that the proposed regulation of self-consumption will eliminate the only option left to the photovoltaic sector to survive in the short term in Spain following the imposition of a moratorium on feed-in tariffs for new renewable energy projects.