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Latino Daily News

Thursday March 31, 2011

Spain’s Solar Subsidies Cut During Budget Crisis

Spain’s Solar Subsidies Cut During Budget Crisis

Photo: Spain Solar Industry

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Spain’s three largest utilities Iberdrola, Endesa and Gas Natural weigh in on the renewable versus nonrenewable debate and the solar subsidies program.

Spain has had a solid reputation for pursuing alternate energy projects, specifically solar power, but current economic conditions have caused some severe slashing to the solar subsidy budget.
Currently the utilities have paid out €20bn to subsidize solar and wind projects, and are still waiting for the government to pay them back. The utilities also argue that the coal and gas plants they were forced to build in response to some blackouts several years ago are loosing money as they are only being utilized half the time.

The solar industry on the other hand has been thriving due to the subsidies. The result is that in 2010 Spain had 10 times the solar capacity than they planned for, and a much larger liability in the subsidies it owes.

Both renewable and non-renewable advocates agree that by the government cutting subsidies retroactively on projects they had already committed to, future investors will be very hesitant to trust any government programs.