After a month-long delay, the Spanish government has created a register ofsolarprojects that are set to receive the new feed-in tariff for 2009.
The move should bring relief to solar project developers and their solar panel and other equipment suppliers. They have been putting their projects on hold and waiting impatiently for the register, which in effect kicks off the first phase of the new feed-in tariff program that was announced last October.
The Ministry of Industry, Tourism and Trade posted a notice Thursday saying it has approved 392 projects for receiving the tariffs, which are government-set solar electricity rates.
"We have been paralyzed since last summer, and have lost more than 15,000 jobs. A lot of companies are in trouble and waiting for the register and the reactivation of the market," said Thomas Dias, the communications director for the Spanish Photovoltaic Industry Association (ASIF), in an email shortly before the government published the register.
The posting of the register is good news to solar panel companies such as Suntech Power Holdings in China. During a conference call to discuss quarterly earnings earlier this week, Suntech's chief strategy officer, Steven Chan, said the company's customers in Spain had set up all the components except for installing the solar panels because they were waiting for the government to decide who could get the feed-in tariffs (see Suntech: Solar Market Looking Up).
Spain has been a key market for the solar industry worldwide. The government estimated that the country added more than 3 gigawatts worth of new solar power in 2008 alone –more than all of the new installations worldwide in 2007 – thanks to the generous feed-in tariffs designed to boost clean energy production.
The tariff program requires utilities to pay the government-set rates under long-term contracts for solar power. Those rates are higher than the prices for conventional power, which makes installing and operating solar energy systems a booming business not just for local project developers but also solar panel makers from Asia, the United States and Europe.
Germany, France and other European countries have similar programs. The solar electric rates are supposed to fall gradually over the years because the costs of installing and operating solar energy equipment are expected to come down until they are on par with the costs of generating conventional power from sources such as coal and natural gas.
The Spanish government thought it would have enough time to sift through the applications between October and mid January, when it was supposed to publish the register. It received 1,824 applications initially. After getting rid of duplicated applications and those that were withdrawn from applicants themselves, the government reviewed 1,599 applications to see if they had filed all the proper permits and met requirements.
"It took so long because the government was overwhelmed by the amount of applications they received," said Francesco d'Avack, a solar market analyst at New Energy Finance in London.
This wouldn't be the first time the government underestimated its domestic market's appetite for solar. It implemented the previous set of feed-in tariffs back in 2007, it had set a national installation cap of 400 megawatts. The cap was supposed to be in effect through 2010. But Spain had installed 344 megawatts by September 2007, prompting the government to suspend the cap while it tried to create a new set of feed-in tariffs (see Is Spain Shining Too Brightly?).
After intense negotiations with the solar industry representatives, the government announced the new tariffs last September. The new tariffs, which include different solar electricity rates between rooftop and ground-mounted systems, also come with a cap of 500 megawatts for 2009. The rooftop system will get 34 euro cents per kilowatt hour while the ground system will receive 32 euro cents per kilowatt hour.
The government has devised different rules this time around to minimize any mad rush to install systems, a phenomenon that led to allegations of fraud last year. For one thing, the 500 megawatts won't be available all at once. They will be parcel out in four blocks this year. The register announced Thursday represented the first set of allocations. Three more registers will be published quarterly before the end of the year.
There is one unresolved issue that could significantly impact the current tariff program. The government hasn't decided what to do with developers who didn't complete installing projects and filed all the necessary paperwork to qualify for the more lucrative tariff that expired last September. Authorities have been investing allegations of fraudulent submissions of paperwork of installation of fake panels to buy time (see Solaria Has a Solar Park Deal for You).
The government is considering whether to allow those projects to qualify for the new tariffs, an approach that would make the competition for the 500 megawatts this year a whole lot more intense (see Solar Fraud Could Eliminate Spain Solar Market). Some developers apparently claimed that they filed incomplete paperwork but received assurance from local authorities that they could complete the filings after the September deadline, d'Avack said.
Dias said developers who are found to have committed fraud shouldn't be allowed to get the new tariffs.
"If a company took too much risk to get a better tariff and committed some kind of crime, then that's its problem and not the problem for the rest of the PV sector," Dias said.
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