It has been revealed that the Spanish Sub-director General of Electricity of the Spanish Ministry of Industry, Tourism and Trade has met with representatives from the Spanish Renewable Energy Producers Association (APPA), the Spanish Photovoltaic Industry Association (ASIF), and the Spanish Wind Photovoltaic Business Association (AEF) in the ministerial offices, to inform them that the Government will be cutting the FiT paid to PV energy producers.
Ministry of Industry sources contacted by Renewable Energy Magazine warn that it is still too early “to talk about percentages or about how much the new FiT will be”. They are also not prepared to comment on when the cuts will be made.
The possibility of a tariff cut is nothing new. Last October, the PV industry sent a letter to the Secretary of State for Energy calling on him to arrange a meeting to study how to establish the reductions and associate them with changes and improvements in regulation. The letter also proposed introducing the reductions in 2012, as set out in Royal Decree 1578/2008 which regulated the PV sector at that time.
According to the industry, the problem therefore, is not so much the tariff reduction, but that “unilateral cut in tariffs, without anything in return and without waiting until the date established by Royal Decree 1578/2008, will have a significant impact on projects planned for coming months and will endanger the legal security and interests of investors, because they represent another sign of regulatory instability”.
Developers have a year to complete their projects from the moment they are inscribed in the Registry for preliminary assignment of remuneration. “What will happen to projects that have been started under one set of economic conditions if these conditions change halfway through?”, ask industry players. A transitional period is needed. As well as the impact on specific projects, in general "possible investors may be dissuaded by the legal insecurity and instability that such a change would create, especially after last year’s paralysis in the sector”.
Raising the cap?
The associations present in the meeting with the Ministry claim that no mention was made of a possible increase in the cap of 500 MW per annum established by the Ministry for new PV capacity accompanying the tariff cuts. Such a move could offer some relief to the sector, which has repeatedly called for the cap to be removed since Royal Decree 1578/2008 was introduced.
The Ministry does not however plan on touching the cap. The new Renewable Energy Plan is has not yet been announced, the Ministry says, and “the plan is the document that will set out capacity targets. Now is not the time to decide whether or not the cap should be changed”. According to sources consulted by Renewable Energy Magazine, the Government is not against considering changes that could reduce the impact on consumers, improve the learning curve of these technologies, or resolve the problem of speculation.
News of the tariff custs in Spain comes just as Germany's ruling coalition agrees to delay recently announced cuts in its PV FiT by two months, easing pressure on solar companies which will have more time to sell components.
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