Sun Worship

How Spain’s solar energy is set for a reboot

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Spain has no oil or gas reserves, or none that, for environmental reasons, it is prepared to exploit, and soon its last few coalmines will close as well. But the same thing that drives the nation’s tourist industry could soon be harnessed to meet much of its energy needs: sunshine.

As things stand, according to the Red Eléctrica de España, in 2017 around a third of Spain’s electricity demand was provided by renewable energy sources. However, the bulk of this was met by hydro and wind power and only about 6 per cent by solar. All this is about to change.

Pull quote: When the previous Spanish government introduced the so-called ‘sunshine tax’ in 2013 it brought solar power development to a virtual standstill.

Homeowners, far from being encouraged to install solar panels by being able to recoup some of the outlay by selling surplus energy to the grid, were instead treated as suppliers and taxed accordingly.

In contrast, countries such as Germany offer financial incentives to people who install solar panels, with the result that the country – with around half the sunshine hours – generates 10 times more solar energy than Spain.

However, now the tax is being scrapped and with the European Union lifting import duties on cheap solar panels from China, Spain is set for a solar power boom that could create tens of thousands of jobs.

solar energy panels in Spain
Solar panels in the Spanish countryside. Image: Alamy stock photo

There are already projects in the pipeline that will multiply by six the amount of solar energy generated. If all of these projects go ahead the total investment will be in the region of €23 billion. According to the International Renewable Energy Agency, the cost of installing solar power has fallen by 73 per cent since 2017 and no longer needs to rely on subsidies to be competitive.

The biggest impact could be seen in cities which currently are least served by renewable energy sources.

This is the result of a focus on wind power, which requires large open spaces, so that the majority of the renewable resources are located in regions of low population, such as Galicia and Castilla-León. For example, Galicia, with a population of 2.7 million, produces 7,152 megawatts from renewables compared to the Madrid metropolitan area (pop. 6.6 million) with 231 MW.

Barcelona city council has already set in motion a project to rectify this imbalance. When the electricity company Endesa failed to bid to renew its €34 million a year contract to supply the electricity that lights the city’s streets and public buildings, the city council opted to establish its own company, Barcelona Energia (BE).

The company will buy electricity generated by the vast bank of solar panels at the city’s Parc del Fòrum (a large public park by the beach) and other sources certified as renewable, and in the medium term aims to use solar panels to double renewable generation from 1.8 MW to 3.5 MW. The city authorities bowed to pressure from environmentalists and scrapped its original plan to buy electricity generated by a waste incinerator.

Early in 2019, BE plans to expand from supplying municipal needs to offering the service to individual householders. For legal reasons, at present it can only supply up to 20,000 households who can sign up on a first come, first served basis. Similar municipal schemes are already operating in England in Nottingham and Bristol, resulting in lower bills for consumers and a return for the local authority.

At present the Barcelona scheme isn’t promising cheaper electricity but will ensure access to the most vulnerable. “We’re not competing on price but on values,” said Eloi Badia, the councilor responsible for BE. “A business that seeks to make a profit isn’t the same as one dedicated to ensuring that everyone has access to energy.”

Solar energy panels at the Parc del Fòrum in Barcelona
Giant solar panel at the Parc del Fòrum, Barcelona, next to a conventional electricity plant. Image: Alamy stock photo

For a typical Spanish household, the cost of installing solar power and becoming self-sufficient in electricity is around €6,500, although batteries to store the power generated could cost almost as much again.

However, as most city-dwellers live in apartment blocks the issue is more complicated and the law would have to change if residents were to obtain their electricity collectively. At present, the consumer is defined as the person who rents the individual electricity meter.

For a block to be powered by solar energy there would have to be some method for measuring individual consumption. A further complication is that in most blocks there is a mix of renters and owner-occupiers. The owners of rented apartments are not likely to want to invest in an installation that will be of financial benefit to their tenants but not themselves.

Some residents have tried to solve these problems by converting the building into an “embedded network”, whereby the building has a single grid connection and manages the metering and billing of units internally. However, the plan fell foul of regulators who argued that occupants were no longer free to choose their supplier and there was nothing to prevent the network’s management company from exploiting its monopoly.

Despite these problems, now that the main financial obstacle to developing solar power has been removed and with Spanish consumers currently paying some of the highest prices in Europe for their electricity, there’s little doubt that Spain is going to exploit to the full its greatest single asset, sunshine.

Main Image: Illustration by Frederico Babina