Spain Approves Tariff Reductions for Discharges to the Electricity Grid Produced by Solar Plants

Madrid, 24th November 2010. On the 19th November 2010 the Spanish Government approved the law for the new regulation of tariffs applying to discharges to the grid by photovoltaic solar energy plants in Spain. There is clearly a reduction in the premiums for energy produced by the photovoltaic solar energy. Remuneration for ground photovoltaic plants is curtailed by 45 per cent. The Royal Decree will come into effect as soon as it is published in the Official State Gazette.

In the words of Mr. Georg Abegg, lawyer of the Madrid office of the international law firm Rödl & Partner, the Spanish government is now simply acting in consequence and implementing the measures it had discussed for months. “This new regulation provides investors with planning and legal security. The trend to switchover from big ground facilities to integrated roofing systems will be maintained. Nobody however should get mixed up: with the new tariffs the ground installations may continue to be profitable per se. Also, the tariffs originally granted for the old facilities are guaranteed for 25 years”, says Abegg.

Following the publication of the new Royal Decree the premium of the projects that are authorized will be cut by 45 per cent for ground facilities, and 25 per cent for the big roofing systems and 5 per cent for the small roofing installations. This new provision will affect facilities that submit an application for recording at the pre-assignment remuneration register for photovoltaic installations (PREFO Register) following the effectiveness of the Decree.

The Decree does not envisage a retroactive modification in the tariffs as regards the already registered facilities, as had been rumored some time ago. Facilities that have already been authorized however will no longer receive the premium starting in the year 26, but instead will receive a remuneration that will depend on the market price. In principle, the intention was to charge a premium throughout the entire useful life of the installation.

Lawyer Mr.  Abegg remarks that “this provision sends an important sign to investors in the sense that tariffs are not going to be modified with retroactive effect. This would only have triggered off a long series of legal actions. Apart from impairing Spain’s image as an attractive investment venue for international investors.”

Investors still have a brief time margin in which to acquire projects that enjoy the highest current tariffs, because it is foreseen that the new Decree will come into effect after the third quarter of 2011. The term for presenting projects has now been opened for the first quarter as well as for the second quarter of 2011.

Photos

Photos of the contact persons can be downloaded at the Rödl & Partner press centre on our web site http://www.roedl.de/pressecenter.