Updated: Oct 29, 2019
A Spanish photovoltaic energy developer is planning to install 3,325 megawatts of capacity by the end of 2023 with no support from public funding, taking advantage of a boom in the country’s solar market.
Madrid-based Solaria Energia y Medio Ambiente SA’s projects “are completely subsidy-free and can compete in the market with other technologies,” Chief Operating Officer Dario Lopez said in an interview. “Nowadays, there are lenders that are assuming the price volatility linked to the merchant risk. This kind of projects are already a reality, we’ve reached the green parity.”
The 250 megawatts the company was awarded in a renewable public auction in 2017 can count on compensation if the market price of electricity falls below 32 euros ($36) a megawatt-hour. But only a “destructive” price scenario would trigger that mechanism, Lopez said. “So it’s like having no subsidy.”
Spain turned into one of world’s most-attractive solar markets a decade ago, when generous incentives lured developers and boosted the industry. After a slow down following the government’s decision to cut subsidies that were draining the country’s finances, a decrease in costs has allowed the solar market to return to growth, this time without public support.
Spain has a pipeline of 7,000 megawatts of subsidy-free PV solar farms in the works, the most in Europe, according to a report by BloombergNEF. The country also has 61% of the subsidy-free power-purchase agreements that companies sign with renewables operators, locking in electricity prices for both producers and consumers.