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ECONOMY

The solar sector is feeling threatened as it has to refinance loans and sees its income drop by more than 30 per cent in some cases
11.07.14 - 16:10 -
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Sparks fly over solar energy plants
Solar panels in Morón de la Frontera. :: sur
After four years of successive cutbacks by both the PSOE and PP governments in the premiums paid for producing electricity by renewable methods, this form of payment is now being abandoned altogether. Retroactively from July 2013, these premiums are to be substituted by a fixed payment of 17.5 per cent of the value of the initial investment, regardless of the energy produced by the facilities and available for sale to the market.
But this alternative, which the government calls “reasonable profitability” and says will provide “certainty” with regard to income, is a concept and, above all, an amount, to be decided unilaterally by the Ministry of Industry for each facility.
The criteria it will use does not convince the sector, which estimates that there will be a loss of income of between 30 and 53 per cent in the worst of cases, compared with the previous premium system. With the new model, payments will be calculated on the amount of investment made, efficiency criteria and according to a catalogue of 1,400 different types of installations.
Resistance
The numbers don’t add up and the worst forecasts about the final cutback in electricity reform, which was approved at the beginning of June, have been fulfilled for this sector. The patience of those affected is running out, because they are still paying back the bank loans with which they financed their investments. With their drop in income confirmed, most of them have opted to negotiate and refinance their outstanding debt to gain some time.
The Asociación Nacional de Productores Fotovoltaicos (Anpier), which is the main association of this sector and which has 62,000 members, recommends pursuing this option, above all to avoid having to hand over some highly devalued plants to the bank. Anpier defends this ‘resistance’ because it is optimistic about the final judgement from the international courts, believing that sooner rather than later, these will revoke the retroactive measures put in place by the State, which have also been denounced by foreign investment funds.
Small producers consider themselves threatened by a far-reaching case of legal uncertainty which has already resulted in more than 10,000 claims being made to the Supreme Court.
While waiting for the legal process to take its course, the end of the cycle for the photovoltaic sector has occurred half way through the useful life of the solar energy sites set up during the boom five years ago and which are already being technologically surpassed by much more efficient systems.
Those affected claim that the electricity reform is the final attack by the large electricity companies and the government on a sector that for years has felt demonised by an “institutional campaign” which, they say, has distorted the effect of the premiums on the increase in domestic power bills.
Anpier, with the support of PSOE, IU, Equo, Greenpeace and Coag, among others, organised a demonstration inMadrid last month, the first major protest ever staged by this sector. Demonstrators came from all over the country and marched down the Paseo de la Castellana before handing over written petitions asking the government to give them back their rights and put an end to the “insurmountable calamity” that the change in the regulations poses for their interests.
Many of those who took part were from Andalucía; Malaga, where about 600 investors are based, is the Andalusian province with the least solar energy power, but it is one of the largest in terms of the number of people who were encouraged to invest because of the incentives, many of them shareholders in large photovoltaic parks in the areas where there is the most sunlight.
The message the sector wants to get across to the public differs greatly from that of people who feel they have been defrauded by their bank or affected by huge financial scandals. The ‘photovolcaics’ do, however, have something in common with them: they are also involved in a legal battle against the State, which encouraged them to invest from 2007 onwards with promises of generous returns. In fact, the publicity of the time suggested that the initial investment could be recovered within a decade, thanks to the premiums; that would have been approximately halfway through the useful life of the solar energy parks which began to fill the Spanish landscapes and whose numbers greatly exceeded the government’s forecasts. After that tenth year, the production premiums would be pure income.
The banks had more than enough reason to finance these parks and were very active in marketing loans guaranteed by no less than the State for small operations, as well as large transactions which brought together several participants to create one photovoltaic facility.
After the ‘boom’ in solar panels, the banks remain vigilant about this sector, but some are already having to deal with problematic shares and levels of debt. The debts for photovoltaic projects amount to more than 43 billion euros at present, of which about 25 billion is in the hands of Spanish banks.

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