Portugese PV association: Energy sector could be ‘irreparably damaged’ by tariff cuts

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Portugese photovoltaic sector trade association APESF has written an open letter condemning recently announced cuts to tariff rates for two classes of small-scale PV electricity generation.

APESF called for revision of the new rules, which will apply to new energy capacity installed from 1 January 2014 onwards, with “utmost urgency”.

The letter was addressed to three government ministers, the director general of energy and geology, the secretary of state for energy and the minister for the environment, spatial planning and energy.

The Directorate General for Energy and Geology (DGEG) announced the cuts on 26 December, which are at the same level as cuts announced last year, when rates were cut to accommodate the falling prices of PV equipment.

The newly announced rules affect feed-in tariff (FiT) rates for micro-generation PV systems – anything up to 3.68kW capacity – and for mini-generation PV – classed as anything up to 250kW. DGGE will also cap eligibility to receive FiT rates based on cumulative capacity installed, for the calendar year beginning 1 January 2014.

For micro-generation systems, the directorate has set a cap of 11.45MW capacity to be added in 2014, with projects to receive a FiT rate of €66 ($90) per MWh for the first eight years and €145 (US$197.50) for the following seven years. Mini-generation projects have been allocated 30.35MW of available capacity this year with the tariff set at €106 (US$144.40) per MWh for 15 years.

According to APESF, this represents a cut in the micro-generation FiT of €130 (US$177) per MWh for the first period and €20 (US$27.24) per MWh for the following seven years.

The letter from APESF claims that since prices for photovoltaic modules have risen in the wake of the EU-China anti-dumping case, the cuts may discourage the increased penetration of solar and are contrary to stated national energy policy aims to increase the proportion of renewable energy in the national energy mix. APESF believes that increases in small-scale generation capacity would make it easier to scale down costs.

Among other points raised in the letter, APESF also argued that the cuts represent a discrimination of PV against other technologies, with PV representing only 2% of the nation’s renewable energy capacity at present.

The association stated that the measures would bring uncertainty to the sector and complained of a “lack of coherence and information”, pointing out that unscrupulous companies could still take advantage of loopholes. APESF said the energy sector could be “irreparably damaged”.

APESF’s letter concluded by saying that what most disappointed the association was that although several meetings on the subject of micro- and mini-generation and self-consumption PV had taken place between the association and DGEG and the secretary of state for energy, no action was taken to frame a consensus between the relevant parties.

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