A new law being mulled in Madrid could regulate how home grown solar energy is fed back into the grid… and possibly result in work for the country’s PV installation industry.
It looks as though the final battle for PV in Spain will be fought from the rooftops. With the utility-level solar industry in tatters following the cutbacks on feed-in tariffs imposed by the previous government, Spain’s PV sector is now hoping that an upcoming law regarding self-consumption will provide a modest relief to installers, at least.
Solar bags a bundle for consumers?
Being able to stick a couple of PV panels on your roof and draw power off them is not an issue. Off-grid solar installations are already commonplace across Spain.
For grid-connected sites, meanwhile, there was formerly a legal obligation to feed all production into the grid under Spain’s special regime scheme.
That changed with a Royal Decree issued in December 2011, which essentially stated that you are well within your rights to use the energy you generate yourself to offset what you might have to buy from a utility.
What it did not go into, however, was what you could do with any excess energy you did not use yourself. This was left to a later law which is still in the works and which the government is obliged to publish before April.
In order to provide the incentive that installers need to get back into business, the Spanish PV sector is hoping the new law will support an energy resale mode called net balance (‘balance neto’), whereby any excess is fed into the grid and results in an energy credit you can draw from.
“You cannot always consume all you produce in real time,” says Miguel Ángel Martínez-Aroca Pérez, secretary for the National Association of Renewable Energy Producers and Investors (ANPER, for Asociación Nacional de Productores e Inversores de Energías Renovables).
“Net balance self-consumption means being able to get compensated for the production of solar panels in the future. We are asking for an exemption of tolls on real-time consumption and reasonable tolls for future consumption.”
On that basis, he says, a typical residential PV system could pay for itself within about seven years.
It is not clear whether that figure includes projected hikes in energy such as the as-yet undisclosed April increase that José Manuel Soria, Spain’s Industry, Energy and Tourism Minister, has been forced to impose upon consumers by the country’s Supreme Court.
This is in order to fulfil the government’s legal obligation to pay power distribution companies for costs that have been withheld over a number of years under Spain’s tariff deficit scheme to reduce electricity bills.
In recent years the tariff deficit has gotten badly out of control and Spain’s five main utilities, under the auspices of the Spanish electrical industry association UNESA, are currently lobbying for a 30% increase in electricity distribution toll fares to stop it growing further.
Separately, a study last year by the auditor PwC suggests electricity bills will need to rise by 23% this year and 18% in 2013 to eliminate the tariff deficit. These sorts of rises could make PV investments a lot more attractive to many Spaniards.
In a best-case scenario, Martínez-Aroca believes Spain’s remaining installers could recover up to about 60% of the activity they enjoyed in the market’s heyday around 2008. That is if the new law prescribes net balance, however, which is still to be confirmed.
Martínez-Aroca assumes UNESA, which could not be reached for comment, is lobbying against the PV sector on this as it has on a number of other issues in recent years; “The electrical companies are not in favour of net balance,” he says, as it would dent their profits.
Nevertheless, the early signs are good. Since coming to office last December, Soria has steadfastly refused to get chummy with any particular energy club, to the exasperation of big electrical interests, which had exerted considerable control in the previous administration.
And Emilio Jarillo Ibañez, spokesperson for the Ministry, confirms: “The new Royal Decree which will be approved to definitively introduce self-consumption is called, for now and during the preparatory phase, ‘Net balance’, which tells you everything about its likely content.”
Even if Spain’s PV industry does get the self-consumption law it badly craves and needs, however, it will not help the many grid-connected developers who were caught out by the switch in feed-in tariff rules introduced by the last government.
“Self-consumption favours installers and new developers, but does nothing for existing solar farm producers,” says Martínez-Aroca. For them, he adds: “We are asking that the government be congruent with its former stance against retroactivity.”
Before Soria’s People’s Party (Partido Popular or PP) came to power, he says, it opposed the former administration’s actions on solar feed-in tariffs, because the axing of support for existing plants would lead to legislative insecurity that would deter investors, as has happened.
Now the PP is in charge, Martínez-Aroca alleges: “They are looking the other way, which is just as bad.”