The Future of Spain’s Solar Subsidies

In Spain, even the rising industry of renewable energy is not immuneto the realities of the country’s sizable debt and broader economicwoes. Just last month, the Spanish government slashed subsidies for anynew wind or solar thermal projects in the country. The decision was insharp contrast to last year’s move on renewable energy, when the Spanish government provided 6.5 billion Euros to utilities as pass-throughsubsidies to those who are generating renewable energy.

According to Business Day, Spain’s newest plan on renewable energy will “reduce the premium abovethe normal electricity price guaranteed for new solar projects by 45percent for solar or farms, by 25 percent for large panels on office orfactory buildings, and by five percent for solar panels on homes.”

Spain currently ranks second among the countries with the mostinstalled photovoltaic (PV) generating capacity. But last week theSpanish government decided to go ahead with the newest plan to cutsubsidies after talks broke down over how to make broader changes to the policy on renewable energy subsidies. The discord arose, according to Bloomberg, when government ministers and energy company executives were unable to agree on prices for existing solar plants.

The subsidy reduction could prove to be a fatal blow for some 600photovoltaic (PV) solar plant operators. According to the PhotovoltaicIndustry Association, those operators would be in danger of bankruptcyas a result of the new policy.

Spain’s Solar Subsidies on the Chopping Block