Spanish solar reforms could break EU laws

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The proposed retroactive changes to solar support in Spain could be in breach of two EU directives, according to industry bodies.

In a letter to European Commissioner for Energy Gunther Oettinger, the European Photovoltaic Industry Association (EPIA) and Spanish industry body Unión Española Fotovoltaica (UNEF) questioned whether plans in Spain to charge for self consumption of solar power and to cap returns for PV investors were in line with wider EU objectives.

“In summary, the proposed Electricity Sector Act undermines the internal market and runs in contradiction with the Renewable Energy Directive. It is retroactive, discriminatory and hinders fair competition. It will seriously damage the investment climate for photovoltaics, not only in Spain but throughout Europe, by turning PV into a perceived risky investment,” the letter warns.

“We therefore urge you to investigate any possible violation of the European law and take all necessary actions to give a new perspective to the Spanish renewable energy sector.”

Spain is currently pushing through legislation that charge consumers who use solar power generated by their own panels. The tariff has been set higher than the cost of standard electricity from the grid. The country is looking to claw back an estimated energy budget deficit of €26 billion (US$34 billion).

It also caps the rate of return for investors in solar projects to around 5-5.5% (after tax) above the level of their initial investment. In many cases this will be similar to, or lower than, the cost of borrowing.

“EPIA and UNEF think this reform could be in contradiction with the Directive on 2009/28/EC as retroactive measures weaken the security needed for investments and could thus lead to the non-attainment of the binding objectives contained in this directive,” Marie Latour, EPIA's senior national policy advisor told PV Tech.

“We believe that by penalising self-consumption, the proposal also runs in contradiction with the objectives of a more efficient distribution energy system as promoted by the Directive on energy efficiency [2012/27/EU],” she added.

A statement released by the Energy Commission on Tuesday set out guidelines for intervention in the electricity market with retroactive measures strongly discouraged. The document is a forerunner to EU State Aid guidelines for the electricity market expected in the new year.

“Unannounced or retroactive changes to the support schemes must be avoided. Investors' legitimate expectations concerning the returns on existing investments must be respected,” read the commission statement.

Last month the local government of Murcia announced it had taken the Spanish government to the national constitutional court claiming the reforms breached the international 1994 Energy Charter Treaty.  The document states that signatories should “encourage and create stable, equitable, favourable and transparent conditions for investors of other contracting parties to make Investments in its area”.

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