Spain

Updated January 2012

In November, the nuclear friendly, centre-right Popular Party’s victory claimed election victory, approximately 2,000 small-sized PV plants claimed damages after the Spanish government retroactively imposed a lifetime cap to feed-in tariffs in 2010 and in 2012, a new royal decreed has been introduced to limit the maximum number of hours PV installations have the right to receive an FiT, sparking criticism from the industry. According to the decree 14/2010, from December 23, the number of hours depends on the solar irradiation and climatic zone the PV system is located in. This differentiation will come into effect from 2014. Until 2013, the number of hours is limited more strictly to 1,250 hours for all installations that are registered under the decree 661/2007 and therefore for all PV systems that were installed after the end of September 2007.

The quotas implemented on January 1, 2012 are:

Subtype I.1 = 7.959 MW
Subtype I.2 = 73.334 MW
Type II = 83.161 MW

As compensation, these plants will have the right to receive the FiTs for a further three years – an extension from 25 to 28 subsidized years. Through this, the government expects to save PV subsides of €740 million a year.

History

Spain has one of the biggest renewable energy markets in the world, sitting at the top of the scale with the likes of Germany, the USA and Asia. Previously, Spain's FiT rate was fairly high at €0.32-0.34/kWh. However, this has recently been cut significantly and the subsidy for ground-mounted systems is just €0.0759/kWh.

The ministry has cut guaranteed prices for large, ground-based new PV plants by 45%, while those for large roof installations have also dropped 25% and for smaller ones by 5%.

This stable framework based on FiTs with a premium price recognizes the environmental benefits of developing renewable energy sources, as well as seeing the financial benefits. In the past Spain has suffered the boom and bust scenario possible when implementing an FiT system. The country was (back in 2008) the leading solar market in the world, as its generous FiT scheme encouraged a huge amount of installations. The FiT cuts are aimed at preventing further expansion in order to keep the installs at a reasonable level.

Prime Minister Jose Luis Rodriguez Zapatero said he has made the changes in a bid to restrict power prices and to boost industrial competitiveness and consumer spending. The cost of delivering electricity to Spanish homes has exceeded the revenue from consumers every year since 2005, with the accumulated deficit forecast to reach €14.6 billion (US$20 billion) by the end of 2010. It is the subsidies for renewable energy which account for a sizable portion of the tariff deficit, which the government is now legally obliged to eliminate by 2013.

While the existing installations will continue to receive their set rate for 25 years, the government is likely to restrict the number of hours during which existing generators may earn above- market prices.

The Ministry's press release on the matter revealed that the cuts for new plants will reduce the costs of the Spanish electricity system by about €600 million over the next three years.

Spain's overall plan expects a contribution from RES of 12.1% of primary energy consumption in 2010 and electricity generation from RES of 30.3% of gross electricity consumption. The volume of emissions avoided in 2010 as a result of the Plan is estimated to 27.3 million tons of CO₂.