Spain's government has recently
approved a new national law on self-consumption of energy that taxes
solar installations disproportionately. Most notably, the majority of
self-consumers will be also taxed for the electricity they generate and
consume in their premises, via their own PV systems.
Until recently, Spain had a very general self-consumption policy
framework that applied to both grid-connected and off-grid systems. This
month though, Spain's Council of Ministers approved a new
self-consumption law that has set the country's solar advocates up in
arms with the government.
The main problem with the new law, say solar
advocates, is that it taxes self-consumption PV installations even for
the electricity they produce for their own use and don’t feed into the
grid. Spain's PV sector calls the new law a 'sun tax.’
According to Spain’s Photovoltaic Union (UNEF), the new law requires
self-consumption PV system owners to pay the same grid fees that all
electricity consumers in Spain pay, plus a so-called 'sun tax'.
Specifically, said UNEF, a self-consumption PV owner "will pay a 'sun
tax' for the whole power [capacity] installed (the power that you
contracted to your electricity company, plus the power from your PV
installation) and also another [second] 'sun tax' for the electricity
that you generate and self-consume from your own PV installation (this
applies to installations larger than 10 kW)."
Installations smaller than 10 kW and all installations in the Canary
Islands and the cities of Ceuta and Melilla (these are Spanish
territories in Africa) will be exempted from the second 'solar tax.'
Furthermore, installations with co-generation will be exempted of the
second 'sun tax' until 2020 and the Balearic islands of Mallorca and
Minorca will pay a reduced price. Off-grid installations will obviously
not pay any grid tax whatsoever.
The
new law also prohibits PV systems up to 100 kW from selling
electricity. Instead, their owners are required to donate the extra
electricity to the grid for free. Systems over 100 kW must register in
order to sell electricity in the spot market for the excess power they
generate. Limitations do not end at this point though. Thus, for PV
systems up to 100 kW the owner of the installation must be the owner of
the contract with the electricity company, while community ownership is
prohibited altogether for all sizes of self-consumption systems.
Finally, the law is retroactive meaning that all existing
self-consumption PV installations need to comply with the new
regulations otherwise face an astronomically high penalty fee up to €60
million. This sanction, UNEF notes, is double the fine set for
radioactive leaks from nuclear plants.
The Islands' Paradox
Regarding Spain's non-mainland territories, the new law makes even
less sense, argues UNEF, since the cost of electricity supply is
particularly high (about €184 per MWh in the Canaries and €139 per MWh
in the Balearics), adding €1.8 billion to the Spanish consumers' total
electricity bill. On the contrary, UNEF adds, self-consumption systems
have costs below €100 per MWh and are an ideal solution for island
territories where self-supply generation, at the point of consumption,
is more economical than power transmission from the peninsula.
What Went Wrong?
Overall, UNEF says, "each kWh imported from the grid by a
self-consumer will pay double tolls compared to a kWh imported from the
grid by another consumer." The new law, it adds, makes it uneconomic for
households and businesses to install PV with the latter endangered to
loose in competitiveness too.
The government says the law does not impose taxes but that the fees
are a contribution to overall system costs. Indeed, in other regions
where self-consumption (and elsewhere net-metering) systems are in
place, policies allow for some grid-connection fees that cover the usage
of the network by the self-consumption installations. In practice,
self-consumption installations use the grid as a battery and it makes
sense that they should pay for it. However, this is not the Spanish
case. Nowhere in the world are self-consumers taxed for the electricity
generated for own usage. It makes sense to apply a small fee to the
electricity exported in the network, but customers shouldn’t have to pay
taxes for the self-generated electricity to be consumed on site, say
Spain’s solar advocates.
Renewable Energy World ran an analysis
on the Spanish government’s attitude against solar in July, expanding
on the fallacies of Spain's energy policy. This week’s announcement is
another indication that the Spanish government is in favor of a
centralized energy system, which is a reflection of the past.
“It is clear the energy policy of the conservative party currently
ruling the country does not want to encourage distributed generation,
net metering or self-consumption schemes," José Donoso, UNEF’s general
director, said. "The Spanish government clearly supports the energy model of the last century
where few, very powerful utilities dominate the electricity market. It
does not want more actors participating in the electricity market."
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