Government plans to penalise renewable energy generation at home

Environmentalist and author Chris Stewart at his organic farm in the Alpujarras, where solar power is the only source of electricity

Environmentalist and author Chris Stewart at his organic farm in the Alpujarras, where solar power is the only source of electricity

UPDATED 26/07/2013

The Spanish Government plans to hike the cost of generating electricity at home using renewable sources like solar power, in a move that will penalise many who live off the grid in rural Spain, like the famous author Chris Stewart.

Generating energy at home using renewable sources such as sun and wind thus doing your bit to save the environment is a good thing, right? Not according to the Spanish Government, which has just introduced a draft decree to penalise renewable energy generation at home through higher tariffs.

Under the draft decree, drawn up by the Ministry of Industry, energy generation at home will be hit by a new “support toll” (tarifa de respaldo) that will be 27pc higher than the tariff paid by users supplied by the big energy companies, according to calculations by the UNEF Spanish Photovoltaic Union – a trade body. Once introduced, the decree will allow the Government to raise the price of this toll as it sees fit.

UNEF are unequivocal about what this means. “Far from encourage the use of renewable energies, [the decree] proposes conditions that totally discourage their adoption,” says their press release. “Home generation will be more expensive than conventional supply…..this will impede the development of a practise of saving and energy efficiency that is very beneficial for consumers and the country in general.”

UNEF also make the point that imposing a higher tariff on home generation is as absurd as trying to tax people for lighting a fire and turning off the radiators at home. In both cases people are generating energy at home to substitute electricity from the grid.

Protecting the industry (from competition)

The Government argues it needs to control the growth of renewables at home to protect the energy industry as it goes through a “complicated economic situation.” The electricity companies will be delighted to see off competition from home generation.

Spain is a country with abundant sunshine where solar power generation at home has exploded in the last 5 years, as the price of solar panels tumbled by 80pc, and the crisis encouraged households to seek ways of saving money.

Higher tariffs are obviously bad news for rural homeowners who are off the grid and have no alternative to renewable energy at home. 30,000 households with solar panels will see their bills go up, according to press reports.

Higher tariffs are also bad for the environment, and won’t do anything to help sell homes in rural Spain, where environmentalists like the famous author Chris Stewart (pictured above at his organic farm in the Alpujarras) live. The green lifestyle is part of the attraction for many Northern Europeans buying homes in rural Spain.

“I am appalled by the cynicism, hypocrisy and downright dishonesty of this act by the government, but I have lost the capacity to be surprised by them,” Stewart told me when I asked him about this draft decree.

Once the decree is passed, companies and households that generate their own energy from renewable sources will have two months to register and start paying the new toll, or face fines of up to €30 million, and being cut off the grid. Being cut off won’t bother people like Stewart, but the fines, and principle of it will.

In other European countries like Holland and Germany, solar panels are subsidised and households can sell their energy back to the grid. The EU policy towards renewables is generally in favour of encouraging them.

So solar power at home is encouraged in overcast Germany and Holland, but discouraged in sunny Spain. Makes perfect sense.



24 thoughts on “Government plans to penalise renewable energy generation at home”

  1. Buster

    Corporate Fascism (Government run by corporations for their own interests) as opposed to democracy is the cause of such supposed madness, which is actually all very calculated.
    The people can’t be allowed to win whatever they try to do & whatever the consequences.

    ..all part of the silent war that’s been ‘progressing’ for centuries, but fast approaching the point of singularity where we all lose.

    1. Brenda

      Drive through Andalucia and there are acres upon acrea of solar panels. Are we talking gross hypocracy here? Why can’t Brussels intervene and put a stop to this madness, they seem to have a say in everything else?

  2. David

    Is this only for people who have solar power and are connected to the grid in Spain?

    If so, how does it affect Chris Stewart who relies totally on solar power?
    We also are completely dependent on solar power, so do we need to register, or not?
    Otherwise, how can they cut you off, if you are not connected in the first place?

  3. Ian

    Just in the process of buying our home on the northern Costa Blanca. I had intended to install solar panels for heating both pool and domestic water.

    Shocked to read that there is now a DISINCENTIVE to doing this and that we will be penalised for being “green”. Surely the installations provide much needed work for the Spanish economy?

    Madness! And I thought it was just the UK government that did ridiculous things!

    1. Totty

      I think they are referring to voltaic solar panels that produce electricity. Most solar panels used to heat pool and domestic water consist of black water pipes heated directly by the sun, not by electricity.

  4. Paul

    WOW ! UNBELIEVABLE !!!!!! this surely is yet another confirmation of the corruption prevalent in the administrative corridors of power in Spain. It seems the ties between the barons of industry and the political establishment, known to be there, are stronger than ever.

  5. Paul

    Just a thought, when taking out insurance one considers adding cover for public unrest & riot. Me thinks it would be wise to include cover for the effects of ‘excessive governance’.!!

  6. naomi

    why is when someone in madrid thinks they’ve come up with a stonking good idea to raise taxes/revenue they always come up with some half baked idea…. this one just beggars belief. I wonder if the relevant dept has done any due diligence, worked out just how much revenue this stupidity will raise, and also wonder if this contravenes any EU directive on generating renewables? This couldn’t be more ‘micky mouse’ if they tried.

  7. Mick Costa Blanca

    Will this effect just those whose total electricity requirements are fulfilled by alternative methods, or will everyone who has a solar panel or two have to pay the higher tariff?

  8. Graham

    Reading the El Pais article on this issue it seems pretty clear to me that this is solely related to those properties that are grid connected, and which are also using their own renewables such as solar and wind. If you are totally off-grid then it’s not an issue. If your house or business is not connected to the grid then the electricity company has no relationship with you.

    So I would say that this article, along with the big photo of Chris Stewart in his – presumably off-grid house (if I remember from the book of his I read) – is actually rather misleading and poorly researched.

    Perhaps Mark would care to clarify?

    1. Profile photo of Mark Stücklin Post Author

      I can’t clarify because based on press reports it’s not clear what happens when people are off the grid (and have not option to be on it). Though the article at El Pais does talk about a higher tariff for those who choose home-generation (implying they have a choice, which Chris doesn’t) I found it vague and I expect it will turn out otherwise. If it turns out that people off the grid without any option of a grid connection will not have to pay the higher tariff I will make that clear in a follow up article. I haven’t had time to track down and read the decree so I confess I’m guilty of second-hand reporting. Would you like to read the draft and report back?

    2. Profile photo of Mark Stücklin Post Author

      Graham. I have spoken to the Photovoltaic trade association, representing the industry. They confirm that (as I thought), in its present form, the draft decree does not distinguish between on and off the grid. So if you are off the grid like Chris, and have no option to connect to it, and thus use photovoltaic panels or a wind turbine for home generation, they you will have to pay the higher tariff. So my article was not, “actually rather misleading and poorly researched” as you described it.

    1. Duncan McArdle

      Socialism may be the enswer, Vine, but so would Capitalism be, if it were allowed to operate freely, in a truly competitive way. Then the big utilities (who have massive advantages of scale, which should offer vast economies in the cost of production) would have to COMPETE, not be feather-bedded by Government and the other members of their utility’s cartel, fixing an artificial price in line with executives’ pay and benefits, and the Mickey-Mouse-accountant-doctored balance sheets which they display. What business mega-utility worthy of the name shouldn’t be able to compete with you – facing the large private investment needed to instal your own solar panels on your own roof? Laughable, if it weren’t so tragic, and in the final analysis, corrupt.

  9. Mr Grumpy

    Bonkers! The Spanish Government has lost the plot (again)! They just keep shooting themselves in the foot and destroying their economy with stupid new laws, many of which are destroying the property market that drove Spain’s incredible growth for so many years. It seems that the Government keeps coming up with new schemes to support its big industries (hotels, now this) to the detriment of its population and you have to wonder what incentivises these initiatives.
    It would, of course, be logical for the Government to impose the same tariffs on the energy companies’ renewable energy infrastructure. This might discourage them from destroying our beautiful views with those bloody windmills!

  10. Burke

    Spain is not alone in raising of taxes for distributed energy generation (solar) homes versus standard grid power. An interesting report out of Australia highlights the same conversation going on over there. The argument being made by industries is they need to recoup their costs for infrastructure repair to maintain their obligation and supply energy to all houses as a public utility. When houses start to step of the grid and reduce consumption, then current billing practices shifts the majority of grid repair and maintenance costs to the shrinking pool of users. Unfortunately this includes some of the public who financially do not have the means to go solar. I think there are better ways to do it (the article lists a few options) than to implement a flat tax punishing those who joined the industry movement which is inevitable in a sun soaked country like Spain.

    Here is a link to the Australian report:

  11. Louise

    Whilst I agree with the sentiment that the powers that be have lost the plot on this one, albeit I get Burke’s argument that the suppliers need to cover costs of maintenance to their infrastructure, I’m still very confused as to how they can up the tariff on those of us who are totally off-grid and therefore have no tarrif to ‘up’! To quote Mark’s earlier comment: “So if you are off the grid like Chris, and have no option to connect to it, and thus use photovoltaic panels or a wind turbine for home generation, they you will have to pay the higher tariff.” WHAT tariff?? Can anyone clarify this point?

  12. PG

    The Spanish government and energy companies should be investigated by the EU . This is proving the incompetence and possible corruption with Spanish politics , and this should be jumped on from the highest level ,and the Spanish government sanctioned by the EU .
    When the world is trying to reduce pollution and CO2 , and the EU is spending billions on renewable energy , decisions like this should provoke reactions throughout the EU . If there is proof of the Spanish government protecting energy companies , then both the government and companies should be sanctioned , and the companies no longer allowed to provide energy. Also any political misdoings should be punished severly in the Eu courts .

    1. B H

      We and my neighbours have not had electric for 10 years even though we are 50 metres from a connection ,yes we don’t have 10, 000 metres like 1,000 of others they will not connect us who shooting themselves in the foot ,, hypocrisy at its highest
      Certainly made our lives a misery ,most have returned to uk now we have solar it’s not perfect still need to run generator in winter months to charge batteries sincerely hope this bill does not go through!

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