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RT
July 23, 2013
One of the main producers of renewable energy in Europe, Spain’s solar industry, is edging toward bankruptcy. Producers say they’ll be unable to repay credits after the government’s decision to cut subsidies. Banks will suffer and jobs will be lost.
Energy Minister José Manuel Soria has introduced a new compensation plan for calculating levels of “reasonable profitability” for renewable-energy production, distribution and transportation. It will reduce payments to companies serving the nation’s electrical system by up to 2.7 billion euro annually. It’s hoped the move could help cope with the electricity system deficit that has been growing since 2005 and now exceeds 25 billion euro.
To sap the annual deficit, which has been estimated by the government at 4.5 billion euro this year, Spain is set to raise consumers’ electric bills by about 3.2 percent starting from August, contributing about 400 million euro in extra revenue for the system this year and 900 million euro next year, the Wall Street Journal reports.
Experts are warning that with the increased levies on self-consumed solar energy so high many households will have to pay more for the electricity they generate themselves than they would for regular grid power.
The main trade association for Spain’s electric utilities which distribute most the country’s electricity said “the cuts will compel our member companies to undertake a drastic reduction in jobs and review their investments in Spain,” Asociación Española de la Industria Eléctrica (Unesa) warned.
Spain has over 4GW of installed capacity. For several years the government reportedly pushed electricity retailers to pay above-market, unaffordable prices to renewable-power producers.
