Spanish PV firms say they cannot accept 'retroactive' cut

The Spanish government is planning to cap the number of hours for which existing solar projects can receive subsidies in what will be a further blow to the country’s photovoltaic (PV) sector, says industry association ASIF.

“This constitutes a retroactive or pseudo-retroactive cut and creates just as much legal uncertainty,” says ASIF president Javier Anta, adding: “We cannot accept this.”

Anta says the plan involves limiting the number of hours per year for which existing and future solar installations can receive subsidies to 1,200 hours for fixed panels and 1,664 hours for moving panels. Spanish solar plants currently generate power for an average of 1,600-2,000 hours per year.

Rumours of a so-called “retroactive” cut in solar subsidies have been circulating for months, hitting company share prices and investment plans. Government officials who are planning new support schemes have denied they will make retroactive reductions.

Anta says the energy ministry has called on the solar sector to make sacrifices and co-operate in making savings of €1bn ($1.2bn) a year for the next three years, which imply a cut of 40% compared to the €2.6bn received in 2009.

“If these measures go ahead, the PV sector will disappear and ASIF will have to transform itself into an association for the victims of this decree,” adds Anta.

According to ASIF, solar PV installations in 2009 amounted to only 70MW, down from more than 2.5GW in 2008, after a new quota system was introduced when it became clear the sector had massively overshot targets.

The quota foresaw installations of 502MW in 2009, but ASIF says regulatory uncertaintiesand falling prices for panel manufacturers meant that not even this figure was installed.

The government has promised to end speculation by publishing its new support scheme for the renewables sector for the 2011-2020 period by the end of June.

Spain’s wind sector has moved to distance itself from PV as the competing renewable-energy sectors intensify lobbying to avoid subsidy cuts to their areas.

Wind industry representatives argue their sector is not responsible for high government costs in supporting renewables.

“The problem of the system is the problem of PV,” says João Paulo Costeira, chief operating officer of EDP Renováveis (EDPR). “We have nothing to do with this.” He says Spanish wind has the lowest costs in Europe.

“What we ask is that we are not put in the same bag as other sectors,” says the president of the Spanish Wind Energy Association, AEE, José Donoso. “Wind is not responsible for the [electricity] tariff deficit.”

Donoso says the wind sector has cost each Spanish consumer €1.30 per month over the past five years, but has contributed to lower wholesale power prices.