Compensation for solar developers under Spain’s renewable energy moratorium

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Spain’s Supreme Tribunal has issued various rulings which require that the Spanish state compensate solar PV developers and investors damaged by Royal Decree – Law (RDL) 1/2012, according to a statement from the law firm which filed the suit, Evolutiza Lawyers & Tax Advisors.

The developers and investors are to be compensated “for the expenses and costs incurred in the development of projects which were not able to benefit from the bonuses and incentives recognized in Royal Decree 1578/2008”, as stated by the firm in a press release.

The rulings were published on April 29, and also require the Administration to pay for the cost of the proceedings.

With RDL 1/2012 a moratorium on incentives for new renewable energy installations was implemented. Specifically, it suspended both earmarking procedures and incentives for new installations.

The promotion scheme which was suspended consisted primarily of a tariff for electricity injected into the grid, with a quarterly assignment of the tariff for projects under a specific power quota. This program was established under Royal Decree 1578/2008.

This program was suspended in early 2012. The same year, the office of Evolutiza Lawyers & Tax Advisors filed various property claims against the administration, representing PV developers and investors who had invested in projects which were not able to benefit from the tariff program due to the sudden cancellation for new projects.

These first property claims were dismissed by Spain’s Council of Ministers in April 2014.

Following this the firm filed an appeal with the Supreme Tribunal. In this appeal, the firm posed a petition of liability to the Administration, which it based on article 139 and others in Law 30/1992, which governs compensation for injury in the operation of public services.

According to this appeal, RD 1578 created “solid expectations” of compensation to developers and investors that were written into the pre-allocation register. These expectations were not fulfilled for many developers and investors with the cancellation of incentives for new installations established in RDL 01/2012. Legal counsel representing the Spanish Government for its part rejected claims that compensation was damaged.

The appeal highlights that decisions established under RD 1578/2008 created expectations that projects which were entered into the registry would receive corresponding payment.

These rulings are the first which the Spanish state is required to compensate solar businesses due to RDL 01/2012. These procedures were attended by lawyer Lourdes Álvarez Laube y directed by Antonio Cuenca Molina.

Translation by Christian Roselund. To read the original in Spanish, please see the pv magazine Latinoamérica website.