Photovoltaic in Spain: The first round of inscription for the new feed-in tariff is open!

Madrid - Since the 15th of October 2008 the period for participation in the first round of inscription ("convocatoria") for the allocation of the new feed-in tariff to photovoltaic projects is open in Spain. It is open until the 15th of November 2008. On the 16th of January 2009 at the latest those projects will be announced, which have been allocated the new tariff in this round of inscription.

For the applications to be taken into account the moment of the application’s presentation within the inscription period does not make any difference. Thus, it is not decisive who was the first to submit his application. On the contrary, for the allocation of the feed-in tariff it is essential, of which age the licences, assignments and inscriptions are. The documentation for applications can be downloaded at "http://www.mityc.es/es-ES/Servicios/OficinaVirtual/Procedimientos/SecretariaEnergia/PREFO".

Concerning the background: The Spanish Government has passed the new Royal Decree on the feed-in tariff for photovoltaic-plants on the 26th of September 2008. The publication in the Spanish "Boletín Oficial del Estado" followed one day later, so that the new Royal Decree has entered into force on the 28th of September 2008.

As is well known, the old feed-in tariff was only allocated to those photovoltaic-plants, which had achieved their definitive inscription in the so-called Specific Register of Producers ("RIPRE") before the 29th of September 2008. As such, the new regulation has literally come into force at the very last moment.

The new Royal Decree ("Real Decreto 1578/2008, de 26 de septiembre, de retribución de la actividad de producción de energía eléctrica mediante tecnología solar fotovoltaica para instalaciones posteriores a la fecha límite de mantenimiento de la retribución del Real Decreto 661/2007, de 25 de mayo, para dicha tecnología") entails five very important changes:

1. The photovoltaic-projects are being divided up in a new way, i.e. in roof- and building-projects on the one hand, these sub-divided in projects with a rated power of less than or equalling 20kW and those with a higher rated power, as well as, on the other hand, other projects. Free range plants in particular come within the remit of the latter category.

2. A new register is being introduced, with which fully developed projects are being allocated a feed-in tariff in advance, i.e. before their realisation. Thus, since the 29th of September 2008 only those projects receive a regulated tariff, which have been entered into this new register, the so-called "Register on the in advance-allocation of the compensation" (Registro de Preasignación de Retribución - "RPR").

3. As regards the feed-in tariff there is not just one change: The new regulation sets an introductory tariff of 32 cents per kWh for the first round of inscription in the RPR (excluding roof- and building-plants with a rated power of less than or equalling 20 kW, which receive 34 cents). However, this is just the introductory tariff for the first round of inscription. Already in the second one this introductory tariff can change, if more than 75% of the publicly rewarded rated power will be entered in the RPR in the first round of inscription. What is more, there is no division of free range-plants into 100 kW-projects any more. On the contrary, free range-plants of a size of up to 10 MW are compensated with the same tariff. Finally, another innovation, which has explicitly been introduced, is that the tariff will now only be paid for 25 years.

4. Upper limits for the inscription in the RPR are being set. In this context the basic upper limits for the year 2009 have to be taken as a reference: In the four yearly rounds of inscription in 2009 a maximum of 133 MW of free range-plants and 267 MW of roof- and building-plants shall be inscribed (of which small plants will have a share of 10% and plants with a rated power of more than 20 kW will have a share of 90%). In the following years the basic upper limits will be reduced or increased depending on the development of the introductory tariff. Over and above the basic upper limits another 100 MW will exceptionally be publicly rewarded for free range-plants in 2009 and another 60 MW in 2010. All in all around 1.500 MW shall be entered in the RPR in the years 2009, 2010 and 2011. Then, in 2012 a decision with respect to a new compensation structure shall be taken.

5. It is now mandatory for all plants to deposit the guarantee of 500 EUR/kW. Only in case of small plants on roofs or buildings the sum of the guarantee is reduced to 50 EUR/kW. The obligation does also affect "old plants", i.e. those, which according to the legal regulations up until now did not have to provide a guarantee (especially the roof-plants, but also the free range-plants, e.g. in Castilla-La Mancha!).

These are the crucial changes introduced by the Royal Decree. On top of that a great number of other provisions have been established, in particular on the functioning of the RPR (the order of inscriptions depending on the chronology of the development of the project), the adjustments of the introductory tariff, the adjustments and supplements of the basic upper limits, which are – in part – difficult to understand.

There are another four areas, which shall only briefly be described:

a) Transitional provisions

There are a number of transitional provisions, which are meant to soften the late accomplishment of the new statutory regulations: For the first two rounds of inscription short periods of applications are being set, which are designed to ensure immediate legal certainty for those plants, which have not been able to observe the 29th of September 2008 deadline. Accordingly, in the first two rounds of inscription those projects will be inscribed first, which dispose of the definitive inscription in the RIPRE (NB: It is hence worthwhile to pursue the definitive inscription also after the 29th of September 2008).

b) Reclamation of already deposited guarantees

According to the content of the Royal Decree 1578/2008 the mere fact of the entering into force of the new regulation gives the developer of the plant the opportunity to reclaim a guarantee of 500 EUR/kW deposited in the past. Certainly, he who files the application for the inscription of his project into the RPR will lose this possibility again.

c) Execution period

Anybody who has been inscribed into the RPR must observe an execution period of one year. Otherwise the project will be cancelled in the RPR and – subject to special circumstances – the guarantee will be enforced.

d) Other conditions for obtaining the feed-in tariff

Introducing an extra-condition for the allocation of the old feed-in tariff prior to the 29th of September 2008, the Spanish legislator has permitted himself a special feature: Only those projects shall obtain the feed-in tariff of the Royal Decree 661/2007, which not only have been granted the definitive inscription in the RIPRE prior to the 29th of September 2008, but also have already effectively begun with the production and the feeding-in. Behind this – retroactive and therefore questionable – measure might lie the intention to withdraw the old feed-in tariff again in those instances, where the granting of the definitive inscription in the RIPRE should, strictly speaking, not have been granted because of the incomplete finalisation of the construction of the plant.


Madrid, 31 October 2008


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