The local government of the region of Murcia is taking the Spanish government to the country's constitutional court over its attempts to cull support for solar energy in the country.
In July a raft of new measures to cut Spain’s energy budget deficit of €26 billion (US$34 billion) were announced.
These included a retroactive cap of 5-5.5% after tax on the profit margins of PV projects. For many this will be less than the cost of borrowing.
The rules also “criminalised” self-consumption by forcing people who had installed panels for their own use to buy their own electricity at a tariff above the market rate. Using it directly could see fines of up to €30 million (US$40 million).
Murcia, on Spain’s east coast, has been hit particularly hard.
“The government of Murcia took this decision in order to defend the interests of the thousands of investors will be affected by this new regulation and consider moving on may have serious economic consequences for the region,” a spokesperson for the Murcia government said.
The case is built around two main points according to Murcia's government; firstly that the retroactive nature of the changes are a breach of the constitution and secondly that they discriminate against renewables versus other forms of energy generation.
It is also possible that the changes have breached the international 1994 Energy Charter Treaty by failing to “encourage and create stable, equitable, favourable and transparent conditions for Investors of other Contracting Parties to make Investments in its Area”.