Montserrat and David are small producers of photovoltaic electricity. In 2008, the construction crisis forced David to quit his job as a concrete mixer and Salt’s marriage decided to invest his savings in a small installation of photovoltaic solar panels and sell the energy he produced. A Royal Decree of 2007 established a significant profit margin, with a purchase price of electricity well above the public, and guaranteed those conditions for 25 years. For the couple, with three children, it was a good opportunity and they rented the roof of an industrial warehouse in La Pera to install plates. The project promised a very high yield, but today Montserrat feels betrayed.
When they built the photovoltaic plant, the calculations indicated that they would recover the money in 10 years. After eight years, the marriage has only recovered half. “We do not know if we will recover all the investment”, regrets Montserrat. Their solar panels work normally, but revenues have dropped year after year due to changes in the Spanish energy legislation. “We changed the rules mid-game and felt cheated,” he says. For this reason, Montserrat and David joined the National Association of Photovoltaic Energy Producers (ANPIER), which works to help those investors who have been affected by the cuts.
Oscillating public bid for renewable energy
Royal Decree 661/2007 was part of the promotion of the use of renewable energy sources of the PSOE government, to comply with the directives of the European Commission and reduce carbon dioxide emissions. The document established a sale price for photovoltaic electricity of 0.44 € / kWh for 25 years and 0.35 € / kWh for subsequent ones; when the retail price was around 0.12 € / kWh. Solar technology is expensive, but in those conditions, the investment was very attractive and was a success throughout the country. Pere Guerra, representative of ANPIER in Catalonia, explains that 4,300 families and Catalan companies opted for photovoltaic energy, some 500 in Girona.
The regulations changed in 2010, the socialist government had to modify the conditions to compensate for the unexpected success of photovoltaic energy. First eliminated the special rate after 25 years, and then reduced the number of hours of energy production. The limit was 1,250 hours per year, which means a cut of 20% in Girona. Although it lengthened the period to 28 years, “the three years or more do not compensate the reduction of income”, says Guerra.
The change of color in the Government did not improve the situation. In 2012, a tax of 7% was established on all electric power production; something that small producers had to assume from their pockets. “The big electric companies can compensate the tax on the bills of their consumers, but we sell directly to the system,” according to Guerra. Despite this, Guerra considers that a small victory was 7% because the other option that was being debated was to apply a different tax for each type of energy and that of photovoltaics would have been 19%.
The current regulation, determined by Royal Decree 413/2014, establishes multiple variables to determine the sales rate in an equation that, according to Guerra, is “more complicated than Einstein’s Theory of Relativity”, and varies for each case. The cut with respect to the 0.44 € / kWh of 2007 can reach up to 50%. The claim made by both Montserrat and David and ANPIER is the application of the legal modifications to photovoltaic plants that were built when the 2007 Decree was in force and not just the new ones. “In fact,” Guerra says, “that same Decree establishes that any revision and rate changes will not affect the facilities in operation.”
The flip side: satisfied investors
Despite the controversy, there are producers who are happy with their investments. This is the case of Lluís Coll, a neighbor of Torroella de Montgrí, who in 2007 took advantage of family savings to place an installation on the roof of his house. His initial idea was to use the energy generated for self-consumption but to take advantage of the special tariff the law forced to sell the entire production. As the expected revenues were greater than his usual electricity bill, he decided to go ahead with the project. It has not yet covered the initial investment but plans to achieve it in a few years. Despite the cuts and the increase in the price of electricity, it continues to earn more than it spends.
Also satisfied is Ramon Garolera, owner of a carpentry company in Cassà de la Selva, who decided to install photovoltaic panels on the roofs of their industrial buildings in 2008 to diversify business income. The initial return on investment was 17% and with the cuts, it has remained around 8%, but Garolera emphasizes that “in the bank, the yield would be lower”. As for the cost of the installation, he used his own money and plans to have it recovered within two or three years, a little more than originally planned.
However, ANPIER has many partners who have not had the same luck. Between 2006 and 2008, the Institute for Energy Diversification and Saving recommended that investors ask for Monika Carlo-paul instant transfer payday loans with up to 80% financing to install photovoltaic panels and help reduce carbon dioxide levels. The loans were raised in accordance with the income expected at that time, but with the changes in the rates, the investors have been unable to pay the bank fees. To avoid losing their homes, many have had to deliver photovoltaic facilities to banks, sell them at much lower prices or refinance loans with higher interest rates. “The change of regulations is a problem for these producers,” Guerra protests, “because the State does not pay, but the bank does not forgive”.