Spain’s ‘sun tax’ set to be scrapped

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Spain’s newly created government may execute, among its first orders of business, the cancellation of the solar tax on distributed generation (the notorious “impuesto al sol”), which was introduced in the fall of 2015 by the Rajoy government. Rajoy’s conservative People’s Party (PP) was removed from government after losing a no-confidence motion over a corruption scandal.

In her first official statement, in which yesterday’s announcement for a more ambitious 2030 EU renewable energy target was made, Spain’s new Minister of the Ecological Transition, Teresa Ribera said that her ministry will support the European Parliament’s request to ban the so-called “sun tax”, as well as any obstacle to the development of self-consumption models for solar households and businesses. More details on when the tax may be cancelled, however, were not provided.

Last week, the Spanish solar association, Unef announced its support for the appointment of Teresa Ribera. “We hope that the ministry will keep the promises included in the political program of the new government, which include the elimination of the well-known ‘sun tax’, as well as the administrative barriers currently imposed on the projects of self-consumption, and the definition of a regulation for community solar projects,” the association said.

The elimination of the solar tax may further boost Spain’s rooftop PV segment, especially for C&I projects. Under regulations, only PV systems up to 10 kW are exempt from paying the tax. For larger installations, the legislation for self-consumption imposes charges on both existing and new installations, both on a capacity and generation level.

Despite the tax being in force, last year around 135 MW of new PV systems were connected to the Spanish grid. This growth, which was significantly larger than in the previous three years, was mainly driven by small-sized grid-connected PV systems for self-consumption and stand-alone systems for agricultural use.