Clean Power Solar photovoltaic Spain

Published on June 24th, 2014 | by James Ayre


Spain Approves Bill To Retroactively Cap Solar Investment Returns

June 24th, 2014 by  

A new bill that will retroactively limit the returns that investors can collect on solar PV projects was recently approved by the Spanish cabinet.

The bill — which has remained somewhat controversial since its proposal last year — will put a cap on the profits of projects at 7.4% before tax, and 5.5% after tax. The cap isn’t set in stone, though, and it’s possible that it will fall even lower than this after review.

Solar photovoltaic SpainImage Credit: Solar Field In Spain via Shutterstock

The content of the bill will be applied retroactively from July 2013 onwards as well as, of course, applying to new installations.

“The Royal Decree approved by the Council of Ministers penalises not only the past but also the future,” stated Jose Donoso, director general of the trade organisation La Unión Española Fotovoltaica (UNEF). “With the legal uncertainty that has been created for our country, it will be very difficult in the future to convince investors that come to this area, or only do so with a risk premium that will hurt the competitiveness of technology.”

Even though the bill has already been approved, there’s still a chance of it being struck down by the country’s courts, something that UNEF intends to pursue — with the charge that the changes are in violation of EU directive 2009/28/EC.

In related news, a new study from the University of Valladolid has found that Spain possesses somewhere around 700 GW worth of potential geothermal energy capacity, easily enough to power the whole country. Of course, as of right now, the country has exactly 0 GW worth of geothermal capacity. 🙁

What do you think, a geothermal-powered Spain? Will solar get back on course? Will this solar bill get dropped by the courts?

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • dango-man

    Solar is a no-brainer in Spain and it’s stupid that they are trying to kill it which will increase the cost and risk of their energy supply in the future. It’s particularly sad when put into comparison with countries like the UK which receive half of the solar irradiation of Spain and installed 10 times as much solar power in 2013 and 1000 times as much in the first quarter of 2014. That’s if I have got my numbers correct as it seems Spain only installed 1MW in the 1st quarter compared to 1.1GW to the UK.

  • Ronald Brakels

    Generally speaking it is not a good idea for governments to try to pick winners. But to hit a winner on the back of the head with a shovel and then bury it in a shallow grave is even worse.

  • anderlan

    The world seems full of people in old industries determined to protect themselves from the free market and technological disruption, even buying protection from the government. It’s the same story everywhere. Where’s the outrage?

  • JamesWimberley

    “Somewhat controversial” is an understatement. It’s reckless and arbitrary. Since UNEF is alleging a straight violation of EU law on despatch priority for renewables in the wholesale market (Article 16(2) of the Directive – link), what will happen is that the first Spanish court seized will refer the matter to the European Court of Justice in Luxembourg for a ruling. UNEF may well win. Alternatively the Spanish courts may say the violation of EU law is so patent that it will simply rule for UNEF, leaving it to the Spanish government to appeal to the ECJ.

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