The Sun, At Risk in Spain

Miguel Sebastian, the Spanish minister of Industry, recently announced his plans to cut the feed-in tariff for solar energy in Spain. His decision will not be effective until sometime this month, when the National Energy Commission and the Estate Commission give the last word.

The decision is part of the government’s austerity plan, developed to comply with EU guidelines for improving the troubled economic and financial situation of the country. PV and thermosolar received €2,588m ($3,303m) in subsidies from the government in 2009, yet contributed to only 2% of the total amount of energy consumed in Spain during that year. The minister does not believe the benefits justify the cost.

The plan reduces the subsidies for the installation of new plants, and those for large roof installations by 45% and 25% respectively. Subsidies for small roof modules will be reduced by 5%. Moreover, the associations of solar energy producers claim that Mr. Sebastian aims to retroactively cut 30% of the subsidies that were approved in the past for operating installations. This means a further reduction of €1,000m ($1,276m).

The ideas of the minister are threatening the sustainability of the country’s energy system. We must take into account that Spain’s only major domestic source of energy is coal, which supply will run out in the next 25-50 years, and that the majority of the energy consumed is imported. Besides knowing these facts, the National Energy Commission blames renewable energy for the 11% increase in the cost of electricity in 2008 and threatens with further increases.

The media has echoed this sentiment to the already exhausted population, some of whom are starting to see green energy as a burden -note that Spain has 20% unemployment, 66% of the Spaniards earn less than €18,000/year ($22,856/year), and tax payers support one of the highest income tax levels of the EU.

We have no choice but wait some days and see what happens in September, although the “Renewable energy country attractiveness indices” elaborated by Ernst & Young seems to reflect the uncertainty or anticipate the decision: Spain has gone down to the 8^th rank from the 3^rd in only 3 years.