Solar industry takes to streets to protest against retroactive tariff cuts in Spain

As the longer lasting effects of the global recession start to bite, we have witnessed a spate of street protests across Europe: tuition fee marches by students in the UK, unrest over austerity measures in Greece, and a mass demo in Dublin about the Irish government’s handling of the recession. Tomorrow, however, will see the turn of the solar photovoltaic (PV) industry to vote with its feet.

Two PV industry defence organisations in Spain, Suelo Solar and Plataforma Legal Fotovotaica, have issued a call for members of the industry to come together tomorrow,Tuesday 25 January, at 15:30 in the vicinity of Spain’s Congress in Madrid to protest against retroactive measures imposed through Royal Decree 1565/2010 and Royal Decree Law (RDL)14/2010 (the latter pending enactment in Parliament this month), which will see previously enacted feed-in tariffs for solar energy being cut.

Such retroactive cuts have been strongly rejected by the industry for two main reasons. Firstly, they could dramatically alter the rates of returns on existing projects, which have been designed assuming that the feed-in tariff applied when they were built will continue to be in force during their lifetimes. With retroactive cuts, these rates of return could be dramatically eroded. Secondly, the industry warns that this u-turn by the Spanish government is having a negative impact on the sector’s image internationally, with foreign investors thinking very hard before investing in the Mediterranean country or choosing to invest in countries with more regulatory stability.

In a letter to the Spanish President, José Luis Rodríguez Zapatero, in May for example, a group of international investors and investment managers holding investments in Spanish PV projects with a value of about €3 billion described such retroactive measures as “unprecedented and potentially damaging”. They warned the step would result in “the loss of all or nearly all of our shareholders’ funds and clients’ pension and insurance funds invested in the equity of these projects”. The letter went on to stress that such measures “could have very serious long-term ramifications for Spain’s ability to attract foreign investment”.

Meanwhile, the Spanish Renweable Energy Producers Association (APPA) said in December that: “the inexplicable bitterness of the Minister of Industry towards the solar photovoltaic sectoris leading inexorably to ruin" and that by introducing retroactive measures, the Ministry of Industry was sending out a "harmful" message to both Spanish and foreign investors, "attacking" the legislation that guaranteed returns at the time plants were installed. Referring to a recently published survey by Opinion Research Business, APPA sais “•the retroactive cut in PV premiums will increase Spain’s sovereign debt by almost €4 billion", which emphasises the extent of the problem.

Solar Pride

In light of the potential impact on the sector and Spain’s wider economy, Suelo Solar and the Plataforma Legal Fotovoltaica have called members of the solar industry in Spain to rally in its defence under the slogan “Solar Pride". The organisers of the protest are encouraging everyone to meet at the junction between Carrera de San Jerónimo and Paseo del Prado, near to the Palace Hotel at 15:30 tomorrow, the day before Congress meets to enact or repeal RDL 14/2010.

On its website, Suelo Solar explains the rationale behind this call to protest, such as "the harm and punishment that the photovoltaic industry is experiencing at the hands of the Ministry of Industry since the new remuneration framework was introduced, and by members of the media close to [conventional] electricity utilities" and "the retroactive content of Royal Decree 1565/2010 and Royal Decree Law 14/2010 and the dark future that lies ahead for the sector".

The protest is being supported by a number of sector heavyweights, including the European Association for Renewable Energy (Eurosolar), which is drumming up support for the event. “The Spanish sector should follow Germany’s example,” it said in a recent announcement; referring to a demonstration in Germany a few years ago when the feed-in tariff there was put in danger. German society organised a mass rally in defence of the renewable agenda which brought together everyone from metal trade unions and farming bodies to political parties, and ecologist and renewable energy organisations. Tens of thousands of people met in front of the Bundestag, even renewable manufacturers that arrived with enormous trucks loaded with wind turbines and solar arrays.

“Today, protests are the only way to challenge the Spanish government’s backward-looking policies on renewable energies, especially solar PV,” said Eurosolar. “Tens of thousands of Spanish citizens who invested in solar PV now feel they have been robbed by the retroactive amendment. Spain is losing the opportunity to leave the crisis behind, as it has destroyed the industrial sector created in recent years around renewables”.

On Wednesday, we will find out if the protests have been listened to by those in power.

For additional information:

Suelo Solar


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