Clouds over Spain: solar feed-in tariff to be slashed by up to 45%

Spain’s Ministry of Industry issued a press release yesterday announcing that it has sent the National Energy Commission a proposal for a Royal Decree to cut current feed-in tariffs for solar photovoltaic energy by up to 45%.

Since the start of the summer, the Spanish solar photovoltaic sector has been involved in talks with the country’s Ministry of Industry regarding the Spanish government’s plans to cut feed-in tariffs for solar energy. At times, the process has been more like a sopa opera than a rational dialogue between government and industry with considerable uncertainty, rumours and unsuccessful meetings abound.

Yesterday however, the final chapter of the saga came to an end as the Ministry of Industry responsible for overseeing the energy sector in Spain issued a press release revealing that it has sent a proposal to the National Energy Commission for a Royal Decree introducing cuts to the feed-in tariffs for solar photovoltaic energy, in addition to the previously announced cuts to wind and solar thermal electric feed-in tariffs agreed with these two latter sectors earlier this year.

45% cut for ground-based arrays

The Ministry of Industry has officially proposed a 45% reduction in the feed-in tariff for future ground-based solar photovoltaic installations, a 25% cut for large rooftop arrays, and a 5% cut for small rooftop systems. According to the Ministry of Industry press release, “these cuts repond to technological improvements and cost reductions in the photovoltaic sector”.

In addition to the feed-in tariff cuts, the Ministry of Industry also proposes among other measures that: installations covered by the prevailing Royal Decree 661/2007 should only be entitled to collect the premium for 25 years; any capacity quotas that are not fulfilled should not be carried forward for future rounds of awards; and that medium and large arrays should be more tightly regulated in terms of their “visibility and management capacity” to ensure they can be integrated into the electricity system in the best possible manner in the future.

The Ministry of Industry said in its press release that the proposed measures “will enable these technologies [wind, solar photovoltaic and solar thermal electric] to contribute over time to reducing electricity costs and create a more visible and stable framework in the future”.

It was also revealed in Sunday’s press release that a proposal for a Ministerial Order on the quality of photovoltaic installations has also been presented, “establishing the technical and quality requirements” thereof. This proposal calls for a Ministerial Order which ensures equipment and components integrated into these facilities comply with relevant EU quality standards, regulates the energy performance of arrays to ensure guarantees are honoured, and establishes a certification system for installers of photovoltaic arrays.

News of the cuts will have come as a major blow to a sector that has already suffered from previous government intervention just as the global economic crisis squeezed investments in the sector. However, the timing of the announcement was carefully planned to raise as little controversy as possible, coming not only on a Sunday, but also at the start of August when most of Spain closes shop for the summer break.

As a result, comments from the industry have been hard to come by, although Spain's solar photovoltaic trade associations have described the proposed 45% cuts as “madness”. In previous meetings with the sector, Industry Minister, Miguel Sebastián, was also quoted as saying that his government “did not want ground-based solar arrays” any longer. These significant cuts, which considerably exceed similar measures announced in Germany earlier this summer, will certainly have put a dampener on the holidays of those making a living from solar photovoltaics in this Mediterranean country.

Boosting distributed generation

Despite this bad news, the Ministry of Industry did give some encouragement to Spain’s renewables sector in the same press release issued yesterday, announcing that it has also put forward a proposal for a Royal Decree to “encourage and develop distributed generation” by simplifying the process for obtaining permits to connect renewable energy installations of less than 100 kW to the electricity grid, as “a first step towards energy self-sufficiency”.

Ministry is behind electric vehicles

The Ministry of Industry also announced a further proposal for a Royal Decree aimed at specifying and developing the rights and obligations of "load managers" (a term established in Royal Decree 6/2010), specifically with regard to the contribution of electric vehicles.

For additional information:

Spanish Ministry of Industry


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