Spain’s solar industry is making strides again following over five years of regression under the so called ‘sunshine tax’, implemented by the conservative Partido Popular government in 2013, under what critics say was significant pressure from energy companies.
This tax meant that people who installed solar panels for their own personal use, were treated as energy suppliers and taxed at the rate which applies to energy suppliers. Further illustrating Spain’s delay in this area during that period, a country so rich in sunlight, but having only one thousand installations of this kind, compared with more than one million in Germany.
The tax was scrapped after the Socialists returned to power in 2018.
Two Spanish cities, at varying ends of the economic scale have been particularly ambitious in terms of how they incorporate renewable energy into the running of their urban municipalities. In the north-east, Ada Colau, Barcelona’s Mayor, has implemented a policy of ensuring that all the city’s municipal services and buildings are fuelled by renewable energy. The city of Cadiz, in the south west, has re-elected Jose Maria Gonzalez as mayor for a second term, with sustainable energy being the focal point of both campaigns.
The case of Cadiz is a curious one, as it has its own power company, which was established in 1929. Since 2017, Electrica de Cadiz has managed to supply all the city’s needs with renewable energy sources.
Since coming to power, Gonzalez has established citizens energy forums, which have been the force behind the move to a more sustainable energy drive. “Energy policy should be in the hands of the people. The people of Cadiz are the motor of energy transition”, said Gonzalez in a recent article in the Guardian, adding that 500 thousand euros of the profits from Electrica de Cadiz are used to prevent energy poverty amongst the disadvantaged in the city, as an alternative to terminating their supply. “The profits are invested in Cadiz, they don’t go to Qatar or a tax haven”, he added.
In Barcelona, the city has followed a similar path, yet having only recently established the city’s own energy firm, Barcelona Energie – whose remit is to purchase renewable energy directly from the source, be it solar, wind or biomass.
“We’re not looking to make a profit, and as a public service we can’t subsidise electricity directly as that would be unfair competition, but we can offer people a range of tariffs and in the case of the most vulnerable, we can help directly and bypass welfare benefits and the like”, said Eloi Badia, who is responsible for the city’s energy policy, in the same article for the Guardian newspaper.
Competition laws mean that the company can only supply power to 20 percent of the private market, but Badia has said that it can create subsidiary companies to broaden the reach of the new power company, should demand outstrip supply.
Not all Spanish cities are on the same page, however, and Spain’s drive towards renewable sources of energy may not mean it hits its 2020 emission targets – although it is thinking further ahead than that.
Earlier this year, Spain delivered an Integral Plan on Energy and Climate, which forecasts that 74 percent of energy will have to be derived from renewable sources by 2030, which compares to just 38 percent today.
In order to achieve this ambitious target, significant investment will be required. Western Europe’s largest petrol producer, Norway, recently instructed its parliament to realign the Government Pension Fund Global to divest from fossil fuel assets, and direct its funding toward renewable energy.
The Fund is considered to be the world’s largest sovereign wealth repository. Spain is hoping to benefit from this move, with Teresa Ribera, the Spanish Minister for Ecological Transition, saying that the Government hoped to attract investment of part of the predicted 17 billion euros available from the fund to help Spain’s transition to renewable energy sources.
“Let’s trust that our country has the ability to be attractive and offer enough security to bring part of that re-investment to our own territory”, she said.