Solaria Energía y Medio Ambiente is looking for buyers for its solar parks that the Spanish firm developed even after potential customers backed out.
Solaria, a solar panel maker, has €170 million ($212 million) worth of solar projects for sale, reported Spanish newspaper Expansion on Monday (via Reuters). Solaria began building the projects, which have a combined capacity of 28 megawatts, in the southwest and southeast of Spain at the request of some potential customers who later pulled out of the deal.
The company continued to build the solar parks in the hopes of selling them on the open market. At the time, the strategy made sense given that Spain had a program in place where solar power developers could sell electricity at lucrative, government-set rates.
But while the program still exists, the government recently lowered the rates and narrowed the total installations that will qualify for the rates to 500 megawatts for 2009 (see Spain Approves 500MW for Solar). The older, higher rates expired at the end of September.
Solaria could have trouble getting good money for its solar parks – and qualify for the higher electric rates – if its solar parks were not completed and turned on before the end of September.
The government program to subsidize solar power has enabled Spain to become one of the top consumer markets in the world. The program's goal is to decrease subsidies over time until solar energy costs about the same as conventional power.
Germany and other countries have similar incentives in place, while the United Kingdom is considering the adoption of a similar program, though the government hasn't worked out details such as which types of renewable energy technologies will qualify.
The global credit crunch, which has made banks stingier about loaning money to solar power developers and operators, also could make it difficult for Solaria to profit from its solar projects, said Francesco d'Avack, an analyst with London-based New Energy Finance.
"Banks are having difficulty accessing capital themselves. Spanish banks are much more careful now," d'Avack said.
Solaria declined to comment on the sales, a source close to the company said.
Spanish solar power plant operator Fotowatio is a likely buyer for Solaria's projects, according to Expansion.
In an unrelated announcement, Spain's National Energy Commission said it will inspect solar developments in Spain to verify claims that they were in place to qualify for the solar-electric rates that expired at the end of last month.
"There are signs that there may be fraud in the installation and functioning of wind and solar parks," an unnamed official from Spain's industry ministry told Reuters.
The September deadline to qualify for the higher rates had prompted a rush of solar energy development. The country will likely see 2 gigawatts of solar energy generation capacity by the end of the year, or 1.4 gigawatts more than 2007.
The energy commission plans to visit solar power plants and check the operations against the paperwork the solar developers filed with the government to see if they do qualify for the older rates.
By law, a solar project could qualify for the older rates if the developer had filed all the necessary papers and registered the project with the government. The law doesn't require the developers or operators to turn on the solar power plants and start feeding the grid before the September deadline to qualify for the older rates, d'Avack said.
That rule leaves a loophole for developers to claim their project can deliver more power than it actually can. The developers could register their projects by the deadline and then install the equipment later, d'Avack said.
Power plant operators can't charge for solar power until the plants go online.
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