Spain – Backing away from a Subsidy Program Run Amock
Some renewables projects have become ensnared in the Post Macondo regulatory environment. NRG Energy says that its offshore wind power project (Delaware) could take 3x longer than expected to receive approval, after the spill drove a reorganization of (all) federal offshore regulation.
Spain takes another cut to its solar subsidies. The government, having retroactively trimmed guaranteed (multi year) rates for installed PV, has now cut future project subsidies by 5% (individual rooftop), 25% for commercial rooftops, and 45% for ground mounted “solar farms.”
Spain had been one of the most attractive markets for solar, thanks to both insolation (sunlight – over 2200 hours/year, versus 1800 for Southern Germany) and an attractive, uncapped subsidy for solar. Italy is considering a staged reduction in 2011, roughly 6%/quarter. However, with 30+% IRRs, Italy is likely to remain a robust market for solar PV.. In general, reduced subsidies and the Euro weakness have tempered the competitiveness of Chinese modules against US and Continental manufacturers.
Solar Thermal is coming – Acciona, a Spanish engineering contractor, has become the leading developer and operator of concentrating solar, where sunlight heats a fluid, which then can drive a turbine and/or be stored for off-peak use. CSP is nearing commercial competitiveness for large, utility scale projects, although, in some markets, the water consumption is a challenge.