Spain: Government suspends controversial 7% solar power tax

10/6/18, 11:33 AM -

The recently elected Spanish government is set to suspend the country’s controversial 7% solar tax.

The removal of the controversial sun tax in Spain will give a push for PV in Spain.
The removal of the controversial sun tax in Spain will give a push for PV in Spain.

The ‘sun tax’ is one of the most controversial laws in Spain and was implemented by the previous government of Mariano Rajoy in 2012. It has drawn criticism because it charges Spanish homes fitted with solar panels with an additional tax of 7% to remain connected to Spain’s electricity grid should the solar panels not produce enough energy.

According to Spanish energy experts, the average family home with three solar panels fitted to their home will have to pay around EUR 70 each month to remain connected to the grid whether or not they use the electricity it generates.

Reduce spiraling energy costs for households

Spain’s new Minister of Ecological Transition, Teresa Ribera, announced that the tax will be scrapped as it seeks to reduce Spain’s spiralling energy costs for households - Spain, in the second half of 2017, had the fifth highest electricity prices in the entire European Union and an annual high of EUR 75.93 /MWh.

The announcement also came at a time when Spain started its shift towards renewable energy sources in-line with an European Union directive that requires all member states to produce 20% of their energy from renewables by 2020.

As a result, solar energy investors and developers - consumer-oriented as well as those seeking to build solar power plants -  are turning to Spain.

Move towards renewable energy

“As the energy landscape of Europe alters, and climate change becoming an even more pressing topic, it is extremely positive to see Spain joining Poland and other countries in Europe in taking the right steps to move towards renewable energy,” said Sun Investment Group CEO, Deividas Varabauskas. “SIG is also assessing Spain as a potential market, so we are very interested in seeing how their positive shift towards renewable energy goes. We already have experience in Spain in structuring and developing a solar PV projects portfolio for 40 MW with local PPA utility company, so we are eager to start new projects in this market.”

450 million Euro funding package for solar and wind

Spain’s new commitment to renewable sources was also outlined by a recent EUR 450 million finance package issued by the European Investment Bank, which will fund Spanish solar and onshore wind projects. Similar to Poland, which is also making the transition to solar energy, these newly funded Spanish renewable projects are expected to help the country meet its 2020 EU renewable energy targets. These plants will also substitute almost 5 GW of its coal-fired capacities, which are set to be closed that year.

The Spanish government’s pivot towards solar energy shows that Europe is serious about renewables. This is compounded by Sun Investment Group, E energija, and Spanish EPC contractor I+D Energias recently signing a non-recourse loan agreement with Dutch ING Bank, which became the first bank in 2018 to finance a commercial PV project in Poland. (HCN)

 Stay informed, get our free newsletter twice a week. Register here

More useful information

https://www.pveurope.eu/News/Solar-Generator/170-MW-subsidy-free-PV-plant-in-Spain

https://www.pveurope.eu/News/Markets-Money/Due-to-EU-requirements-Spain-restarts-its-support-for-renewables-biddings-of-4-GW

https://www.pveurope.eu/News/Markets-Money/Spain-Increasing-solar-self-consumption