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Overview: Solar Power in Spain

Spain is considered as one of the European countries with the longest time sun exposure. The main reason why the country owns the leading role in terms of the development of solar power

As a matter of fact, Spain was one of the first countries that deployed large scale solar photovoltaics and was also considered as the first country for concentrated solar power (CSP) in the world last year 2018. They also offered cheaper prices for grid-connected solar power to encourage the industry to embrace and support solar power generation in the whole country. 

With that being said, solar power installations totally boomed faster than what was expected and prices for grid-connected solar power were not cut down which leads to faster yet unsustainable inflation in installations. Thus, finding its 2nd spot next to Germany worldwide when it comes to solar power installed capacity.

However, the Spanish government drastically reduced the allotted subsidies for solar power and limit the future increases in capacity at 500 MW per year during the wake of the 2008 financial crisis, with effects upon the industry worldwide. While between the years 2012 and 2016, new installations became stagnant in Spain while new solar installation increased rapidly in other leading countries which cause the loss of Spain’s world-leading status to countries like China, Germany and Japan. Whereas, the so-called controversial “sun tax” idea and intimidating regulation regarding solar self-consumption were introduced in 2015 and were only begun to be revoked by the new government, last year 2018. 

Whereas, the year 2019 was said to be likely the start of a dramatic rebirth of the solar industry in Spain following an array of positive solar developments. Since the grid parity prices for solar power were exceeded several years ago, the growth in the solar energy sector is expecting to happen even without subsidies for solar power systems. Also, Spain provided an interesting model to showcase the good possibilities of solar power development once the grid parity has been exceeded by an equal and standardized margin in an industrialized country with good natural solar resources. They also mentioned how the industry develops in a fast-paced environment, as well as if it will be lead by the government or private or if it will be a community-based. Aside from that, they also include in the model if panels will be grid-connected or it is only for self-consumption of power in the households, farms and firms. Large-scale utility power projects and local installations were also mentioned, including the integration of predicted solar power large expansion into the existing power networks.

The legacy of Spain’s earlier development on solar power, the country still remains as the world leader in terms of concentrated solar power. The concentrated solar power is accounted for as being almost the third solar power installed capacity in the whole country and a much higher ratio than other countries’ solar installed capacity in the year 2017. Moreover, there are still various large concentrated solar power stations that remained active in Spain and have provided some purposes to large CSP developments in Morocco. In 2017, Spain took huge auctions for the capacity of renewable energy to be constructed by 2020. Also, solar and wind projects were both able to gain 4GW.

In the last 2018, the combined total solar power installed was 7,011 MW, wherein the 4,707 MW was from solar photovoltaic installations while 2,300 MW was from concentrated solar power. Whereas, in 2016, nearly 8 TWh of electrical power have been produced from photovoltaics, and 5 TWh from concentrated solar power plants. Also in the same year,  photovoltaics accounted for 3 percent of total electricity generation and an additional 1.9 percent for solar thermal.

Solar Power Progress in Spain

In March 2004, the Spanish government had withdrawn all the economic barriers to the connection of renewable energy technologies to the electricity grid through the ministerial ruling. The Royal Decree 436/2004 guaranteed feed-in tariffs and equalized the conditions for large-scale solar thermal including photovoltaic plants. While in 2008, Spain added a record of 2.6 GW of solar photovoltaic power and managed to increase its capacity up to 3.5 GW. Due to its rapid growth in solar capacity, Spain went beyond on top of Japan and the USA in the same year. Also, Spain considered the second leading market as measured by cumulative installed global PV capacity of 24 percent, behind Germany–the world top leader at that time. 

The additional photovoltaic capacity during 2008 were still accounting for more than half of total capacity as of 2016. Furthermore, still in the same year, the Spanish government was committed to achieving a target of 12 percent of primary energy from renewable energy by the year 2010 and the installed solar power is expected to generate a capacity of 10 GW by the year 2020. Spain became the world’s leader in concentrated solar power (CSP) in the year 2010. However, Italy managed to surpass Spain during 2011 following with a later solar rapid growth which made Spain lose its position as the second-largest installer of solar photovoltaic all over the world. 

By the end of the year 2012, Spanish installed 4.5 GW of solar photovoltaics and in the same year, 8.2 TWh of electricity was also manufactured. However, there was also a significant slowdown, around 300 MW in the new installations of solar photovoltaics during 2012. Nevertheless, Spain still managed to install over 2,000 MW of CSP by the end of 2012.

Whereas, during the period of 2014-2016, there was almost no new solar capacity added to past solar capacity. Aside from that, government tariffs have been removed, too. In 2015, the new conditions about the self-consumption of electricity has ended the so-called ‘sun tax’ which was introduced by the conservative Popular Party to tax the development of photovoltaic solar energy in Spain. Due to large subsidies offered by the government to promote the solar industry, during the earlier periods, the system operated under a 180-degree turn along with a punitive solar tax which has been applied to new PV systems to accelerate its maintained growth in the past few years. However, the expected growth in solar generation during 2016 failed to materialize because of the reform delays as well as the extended time taken in forming a government.

Regardless of consecutive failures in developing solar power in the country, in the year 2017, Spain still managed to hold an auction for new renewable capacity which is expected to be launched by 2020. The solar projects they launched only won 1 MW out of the 3000 MW awarded. Moreover, another auction happened in July, after the solar industry’s complaints which resulted in the auction terms to favour wind power. In this auction, solar projects were able to gain 3,909 MW while wind power received 1,128 MW. Solar panel price fluctuations, including financing and land acquisition, can possibly lessen the actual amount of solar power installed.

In the year 2018, a new sector of the solar market begins to advance again the Spanish market including the mitigation of regulations regarding self-consumption generation. There was new solar power installed as well, accounting for 261.7 MW solar capacity. Wherein just 26 MW were connected to the grid and the remaining 235.7 MW were allotted to self-generating installations. This solar project is expected to increase up to 300 to 400 MW per year following further mitigation of regulations in May 2018. Renewable energy auctions held in the previous year not yet expose much impact on grid-connected capacity but it is expected to make a considerable change during the year 2019. 

Based on some industry sources, huge merchants will dwarf the 3.9 GW tendered through government auctions and the power purchase agreements will bring the combined total under consideration to 29 GW. In addition, the re-emerging growth in Spanish solar PV is not being driven by government tenders and subsidies but it was because solar being a highly cost-effective proposition for their electricity needs

In 2018, solar energy in Spain significantly increased by 94 percent as compared to 2017, almost 90 percent of this was self-produced. Over the last five years, the annual electricity bills in Spain have risen by an average of 20 percent and it is expected to rise even more that’s why solar installations are still the priority of the solar industry. Although, the installation of solar panels needed to pass on both the electricity supplier and the Spanish State. Unauthorized panels will be fined by Iberdrola. Furthermore, Iberdrola can also buy back solar energy beyond what is needed by private individuals.

Installed Solar Generation Capacity (MW)

2006 125 11
2007 637 11
2008 3,355 61
2009 3,399 232
2010 3,840 532
2011 4,261 999
2012 4,561 1,950
2013 4,639 2,304
2014 4,646 2,304
2015 4,656 2,304
2016 4,669 2,304
2017 4,688 2,304
2018 4,707 2,304

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Archived news

The Spanish government has recently brought forward rathercontradictory policy developments concerning renewable energy sources(RES). On the one hand, the Industry Ministry has presented thecountry’s National Renewable Energy Action Plan. It foresees that, by2020, 22.7% of the country’s final energy consumption will come fromrenewable sources. This is great news, considering that Spain’s RESEuropean Union (EU) target is 20%. On the other hand, the governmentannounced soon after that it would introduce retroactive cuts in thefeed-in tariff program for the photovoltaic (PV) industry in the context of the austerity measures the country is currently undergoing.According to this plan, existing photovoltaic plants would have theirsubsidies cut by 30%, a figure that would go up to 45% for any new large scale plants. Smaller scale roof installations would lose 25% of theirexisting subsidy, while installations with a generating capacity of less than 20 KW would have 5% taken from their tariff.

It goes without saying that, should these measures be finallyimplemented, they would put Spain’s 20% RES target in peril and make itpractically impossible to reach the 22.7% voluntary target by 2020. In a wider context, this would also strike a deadly blow to the solar PVindustry and endanger the development of this type of renewable energysource altogether, which would in turn seriously affect Europe’stransition to a low-carbon economy. The development of solar PV energyin Spain is widely considered to be fundamental to the achievement of an EU-wide low-carbon electricity generation system – a recent study put forth by the European Climate Foundation and McKinsey & Co.determined that, in order to expand the use of RES for electricitygeneration in Europe, massive amounts of solar electricity will have tobe generated in the sunny Southern Europe and distributed across thewhole continent.

Not surprisingly, the Spanish solar PV industry has strongly reactedto this announcement and is currently engaged in discussions with theSpanish authorities regarding this issue. It has been reported that thegovernment is considering softening its stand and introducing lightercuts — not retroactively – meaning that they would only apply to newinstallations and not to those that already exist. However, this hasstill not been officially confirmed.

As a company committed to the development of clean energy, we areseriously concerned about the devastating effects these measures couldhave. Any cuts in Spain’s feed-in tariff scheme for solar PV will leadto a loss of investors’ confidence, something that is simply fundamental for the expansion of this industry and therefore for the development of a low-carbon electricity generation system that contributes to abatingclimate change and increasing energy security. For this reason, we hopethat the Spanish authorities take a more responsible approach towardsthis matter and keep the current feed-in tariff scheme untouched.

Feed-in tariff schemes are policy mechanisms designed to encouragethe adoption of RES and to accelerate the move toward grid parity byguaranteeing purchase prices that are methodologically based on the cost of renewable energy generation. Thanks to this, the competitiveness ofsolar PV energy has dramatically increased in the last years. It isimperative that such schemes are kept in place until renewable energysources are in a position to compete freely with traditional sources ofenergy.

The only way for the RES industry to move forward is through stableand predictable policy frameworks that provide subsidies designed toincrease their competitiveness, like feed-in tariffs – in one way or the other. Only this way will the right investments be made and theindustry will grow.


Accounting for over half of the world’s solar energy in 2008,Spain’s government subsidies have now all but dried up, creating arenewable-energy collapse with rippling effects into the globalsolar-production industry. What a difference a year can make. The continuous flux in the globaleconomy has caused the Spanish government to slam its doors onpreviously generous funding of renewable energy projects. But whatmakes matters worse is the far-reaching effects of Spain’s clamp down.

Factories world-wide that previously ramped up their production ofsolar-power components found the demand for solar panels had plummeted,leaving a glut in supply and a significant drop in prices. Job cutsfollowed.

Spain’s solar ambitions started as an outgrowth of its earlier pushto become a global player in wind power–something it succeeded at. Byoffering generous long-term support for wind power, Spain became aworld leader. Companies such as Iberdrola SA (MCE:IBE) and Gamesa Corp. (MCE:GAM) catapulted from their home markets to the U.S.

Wind energy was a cheaper renewable option than solar, so theSpanish government sought to make solar power more attractive byincreasing subsidies, just as other countries, particularly Germany,were scaling back support.

As a result, Spain’s solar capacity last year increased to 3,342megawatts from 695 megawatts, the size of a coal plant, a year earlier.Government subsidies for solar power jumped to €1.1 billion ($1.6billion) in 2008 from €214 million in 2007.

But solar is an expensive technology, moreso than wind–and requiresa lot more land. The cost proved to be too much. Solar power in Spain”was a financial product, not an energy solution,” says Ignacio SánchezGalán, chairman of Iberdrola.

Faced with the unraveling world economy and a deepening budgetdeficit, the Spanish government late last year reduced the money itpaid for solar electricity and capped the amount of subsidized solarpower installed each year at 500 megawatts. Spain’s solar-powercapacity has actually shrunk as a result.

Spain is providing important lessons for the U.S., where lawmakersare engaged in a debate about how to support renewable energy. Boostersof clean energy, including President Barack Obama, have pointed toSpain as a success story showing how government policies jump-startedrenewable energy, created new industries, and helped the environment.

Source: The Wall Street Journal

Ashort-story and screenplay writer who has won awards for his work,Harry has recently shifted focus to society’s role in bettering theworld. For him, this means a keen interest in sustainable living, whichalso includes renewable energy.

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