/14th November 2018, RENEWABLE MARKET WATCHTM/ The European solar photovoltaic (PV) market passed through a transition period in the past few years from feed-in tariffs dominated. It is changing to a subsidy-free market driven by tenders and corporate power purchase agreements. Solar PV project developments in Europe are becoming less and less dependent on state incentive programs. They benefit from falling solar PV equipment costs, grid parity in Southern parts of Europe and emerging electricity prices for households and businesses. In 2017 European solar photovoltaic (PV) market scored 25 % growth compared to 2016. The advantages of net metering and self-consumption solar PV projects have also been supporting this growth. With the positive growth expectations for the European solar market, it is quite interesting to see the current situation in Spain as one of the leading solar markets in Europe in the past decade.
Solar resource availability
Spain has one of the highest levels of solar irradiance in Europe. In some regions receiving 2,000 kWh/sq.m. annually, Southern Spain receives sunlight comparable to Northern Africa, making this part of the country particularly suitable PV deployment. According to SolarPower Europe, ground-mounted solar farms account for about 80% of the total Spanish solar market and the rest of solar capacity is built for commercial and industrial use. Spain’s residential solar market is only about 1% of the national solar market.
Historical development of the Spanish solar market
Spain was one of the global front runners in solar PV energy between 2006 and 2012. During this period cumulative installed solar PV capacity grew rapidly from 125 MW in 2006 to 4,669 MW in 2012. Between 2013 and 2017, new installations stagnated in Spain due to the retroactive feed-in tariff cut. Another burden for solar project owners in the country was „sun tax“ adopted in 2015 with Spain’s royal decree (RD) 900/2015 affecting households and small businesses to install solar PV installations for own consumption.
Current market state and prospects
On May 2017, Spain held an auction for the new renewable capacity to be online by 2020. Solar projects won only a minor part of the 3,000 MW awarded. After complaints from the Spanish solar power industry, which felt the auction terms favoured wind power, another auction occurred in July 2017. In this auction, solar projects received 3,909 MW, and wind received 1,128 MW.
According to recently published by Renewable Market WatchTM report, Europe Solar Photovoltaic (PV) Power Market Outlook 2018 ÷ 2027 in Spain are emerging subsidy-free solar projects. Already 930 MW of solar PV projects have secured power purchase agreements (PPAs). One perfect example of such projects is Don Rodrigo solar PV power plant. The project, with an installed capacity of 174 MWp, will use Astronergy and GCL solar panels and Huawei inverters. It will cover around 265 hectares (approx. 190 football fields) and generate around 300 GWh of solar power every year. The project is one of the first solar projects of this size in Europe to be realized without any subsidies. The Project has signed a 15-year PPA with Norwegian Energy Group Statkraft for the sale of their electricity. Construction of this large-scale solar project began in April 2018.
In its latest report the Spanish Ministry of Industry, Tourism and Digital Agenda predict that solar will become Spain’s largest electricity source by 2030. Spain is also one of the countries that recently expressed its support for the EU 2030 RES (Renewable Energy Share) target of 35%. With all auctioned in 2017 solar PV capacity of 3,909 MW projected for grid connection by the end of 2019 and the new package of legislative changes for sustainable energy transition announced by the Spanish government in early October 2018, forecast of Renewable Market WatchTM for the future of Spain’s solar market look optimistic.
More information about the solar market in Spain regarding wholesale electricity prices projections, auctions, greenfield development projects, PPA structure, opportunities and challenged you may read here: Europe Solar Photovoltaic (PV) Power Market Outlook 2018 ÷ 2027
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