Spain’s antitrust authority Comisión Nacional de los Mercados y la Competencia (CNMC) has revealed the scale of the cuts in support for solar farms.
It estimates that between €550-600 million (US$743-811 million) a year will be saved by the Spanish government thanks to the replacement of the feed-in tariff system.
The Union Espanola Fotovoltaica (UNEF) has calculated that the new regime, which limits profitability to 7.5%, represents an average of cut of 25% compared to what an installation would have made from the FiTs.
Larger systems over 10MW face reductions in excess of 40%.
The new system replaces production-based FiTs with a payment based on the investment made in a solar asset.
This is determined by a number of factors including the size of the park, its technical characteristics, operating cost and so on. The FiT payments it has already received are then subtracted leaving the final income required for that investment to return 7.5%.
It is possible that some older plants will be deemed to have already made their 7.5% and will receive no money.
Critics have argued that in some cases, this could not be enough to match the cost of the finance used to build the park.
Already this year Anpier, the country’s national association of photovoltaics producers, has called on the government to put its dramatic energy reforms to a referendum.
Plans for a series of protests in the country, culminating in a rally in Madrid to coincide with the European election in May, have also been announced.
The Spanish government faced a deficit in its energy budget of around €4.5 billion (US$6.1 billion) a year before it announced the changes. It is thought the changes to feed-in tariffs could save it €1.7 billion (US$2.3 billion) annually.
The changes are being challenged in Spain's constitutional court.