Spain is on track to once again become the largest solar market in Europe. Thanks to the elimination of the notorious “solar tax” (“impuesto al sol”), new growth is set to be seen across all market segments, including in C&I.
Despite this, the market will remain relatively flat this year. Indeed, in addition to the need for several obstacles to be removed, developers of large, “unsubsidized” solar parks planning to sell power through private PPAs, or on the spot market, may delay projects over the coming months. Meanwhile, many are waiting for the expected module price drop on the back of recent developments in the Chinese solar market.
- A contained euphoria
Spain’s transition to a new solar era is now clearly evident, despite the slow and steady pace at which it is occuring. Walking through the halls of Genera 2018, which is currently taking place in Madrid, the impression is that the country’s PV sector has started to regain confidence, as well as ground, after several years of frustration and decline, due to a hostile renewable energy policy, implemented by the conservative government of Mariano Rajoy.
However, Rajoy is no longer in charge, and a new government, led by socialist leader Pedro Sánchez, appears more open to attributing solar with the status it deserves: that of a very cheap energy source, able to compete with both other traditional and renewable, energy sources.
Reflecting this, the new leaders attended this year’s event – marking the first time that government has walked its halls for many years. New Minister of Ecology, Teresa Ribera – which a few days earlier announced her intention to cancel the notorious “solar tax” and had pushed within the EU for a 35% binding renewable energy target – came to the fair to meet with local and international exhibitors and players.
Despite the positive changes, however, there are still several issues in the Spanish solar sector, which must be addressed if further, meaningful, growth is to be achieved.
- Abolishing the solar tax
Hours after announcing the abolishment of the “impuesto al sol” on pv magazine , it became our most read news item, and has remained the top read throughout the week, thus underlining that not only in Spain, but also abroad, the tax has attracted wide attention (read: criticism).
The tax, introduced in 2015, never managed to wholly stop (rather it slowed down) distributed generation (DG) solar from becoming a viable solution for homeowners and businesses in Spain. Indeed, over the ensuing years, several dozens of MWs were deployed and in 2017 alone, 135 MW were added.
As almost all of the companies specializing in DG projects and PV product distributors at this year’s Genera have made clear, the tax was only one of the obstacles preventing DG from achieving higher deployment levels. Overall, bureaucracy still remains public enemy number one.
In a positive move, José Donoso, president of Spanish solar association Union Espanola Fotovoltaica (UNEF) told pv magazine that a more flexible regulation on DG may be issued by the end of the summer.
Hernán Gil from German module manufacturer and storage system provider, SolarWatt, meanwhile, outlined the types of customers that are currently investing in DG solar.
“They are people with an environmental commitment, willing to take more risks, but which are also aware, at the same time, that solar is already providing cheaper power right now,” he told pv magazine.
This, according to Gil, is creating a sort of neighborhood effect, which pushes homeowners to invest in a solar solution, because they see others doing it. Residential solar systems up to 10 kW have also never subject to the solar tax.
Gil added that raising awareness remains an important task for the Spanish PV industry, as a number of electricity consumers still believe solar to be a “forbidden fruit”. “Many times we have been asked by potential clients if PV was illegal, due the bad image solar has had in Spain over the past years,” he said.
- Big solar parks the main driver of future growth
While the solar tax and DG activity have made the headlines over the past years, it is the renewed activity in Spain's large-scale sector, which has quietly become the hero, helping to reanimate the country’s solar industry.
With around 3.9 GW of allocated solar power in last year’s auction – all of which is due to come online by the end of next year – and more than 800 MW of solar parks that have already secured a private PPA, Spain is on track to once again become Europe’s largest market, in 2019.
“Already this year we may see the first unsubsidized solar parks being connected to the grid, as a result of continuing activity in the private PPA segment,” UNEF president Donoso told pv magazine.
According to Alejandro Diego Rosell, managing partner of Spanish solar developer, Energoya, many projects may be delayed this year, however, as lower module prices, expected on the back of the recent developments in China, may be seen only gradually.
“In the short term, developers may decide to wait a bit further, in order to take advantage of the expected module price drop. But in the medium and long term, this drop may increase the interest of investors in many projects,” he said.
“There is an estimated 21 GW of developed (many of which are ready-to-build) projects in Spain at the moment. For many of them, including those selected in the auction, construction may be started by the end of this year or in the first half of 2019,” he continued, adding, “Over the next two or three years, however, Spain will become again Europe’s largest PV market.”
Another issue in the short term, according to several local tracker providers with which pv magazine spoke to, may be a bottleneck in the supply of modules, inverters and trackers, as many projects could start at the same time, in the course of both this year and next.
- A transition year
What can be concluded from this year’s Genera event, which was undoubtedly bigger and more enthusiastic than in the previous years, is that 2018 is going to be another transition year for the Spanish solar market.
However, for a sustainable, long-term market to develop, clear market rules and a stable policy for solar and renewables, are still strongly needed.
A signal that the Spanish solar sector is still somewhat stranded in limbo was the absence of big Chinese module manufactures at the event, as well as other big players in the inverter business.
Talking to Andres Doebel, account manager for JA Solar – the only big Chinese panel maker present at the fair with a booth – pv magazine was left with the impression that next year’s event could attract more Tier-1 manufacturers.
“We are really happy to be here for the first time. We came with the intention to attract more attention for our brand, and the first feedback among local installers and distributors was quite positive,” he told pv magazine. “I think it was big advantage for us to be the only big manufacturer being present here,” he added.
All in all, the show has proved that times are changing for good in Spain’s industry, despite the aforementioned issues. According to Javier Alberto Muñoz González, director of communication for Spanish renewable association, APPA, the fact that Teresa Ribera came to the fair demonstrates how much things are changing.
“Prior to the … crisis, Genera was four times bigger than today. We are still far from reaching those levels, but I am sure we are back on track towards a new phase,” he said. “We have Europe’s best solar resource, and step by step we are becoming ready for further big developments, again.”
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