Spain to tax sunlight

Magnum03
By Magnum03 on Thu, Aug 8, 2013 - 2:28am

Spain has decided to put a tax on solar energy.

 http://www.bloomberg.com/news/2013-08-01/spain-hurts-solar-with-plan-to-penalize-power-producers.html

 

The reason behind the move is that Endessa, the former national power company, lost a lot of money gambling on the stock market and desperatly needs cash, eventhough they are making a healthy profit of their core business.

 

I would like to hear from other europeans here, regarding the legality of this law within the EU directives. I don't think it is legal and that Spain would loose, should anyone take it to the EU court. Any thoughts?

11 Comments

silvervarg's picture
silvervarg
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Posts: 57
Probably illegal

In its presented form according to the linked article I believe it is illegal. It tries to tax you for something you never sell to anyone else. It is like taxing you for groving a few vegetables for personal use in your garden.

A more likely outcome in the end is that power-companies will demand that you have an advanced smart meter even as a really tiny producer and that they will pay nothing for the electricity produced during the hours when total country production exceeds countrys demand for electricity. This would proably be legal under normal EU rules.

Ther is one major problem: Spain had a program to increase solar power by promising a fixed amount for every kWh sent to the grid. This way it was easy to calculate the time to make profit from an installation. The problem was that these subsidized solar installations was too generous and boomed to a much higher extent that the politicials had though of before they was able to end this agreement for new installations.
I belive the agreement was for 20 years, so for those installations it probalby illegal to try to change the fee paied for the electricity sent to the grid.

A change like this could still make it uneconomical for most new installations, so it would still meet the essence of the goal for the utiliy companies.

Magnum03's picture
Magnum03
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They will tax anything

Most countries tax you on your property every year, eventhough you are not selling it, so in that sense I don't think it's illegal.

I think you are right onyour second point though. What they want to do is force every solar installation to be on-grid and without batteries. This they could probably get away with. That bugs me. We just bought a complete off-the-grid house and I have no intention of paying to connect it to Endessa.

jasonw's picture
jasonw
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Arizona power company to do the same

I came across the following article that highlights how a power company in Arizona is going to implement a monthly fee for having the abililty to sell power back to the grid. 

http://www.treehugger.com/renewable-energy/no-more-free-sun-arizona-if-s...

 

silvervarg's picture
silvervarg
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Posts: 57
Re: Magnum03

Property tax is kind of a special case. It is the oldest thing to tax throughout history and often used to get "natives" to work as this creates a need to get cash to pay tax for their houses/sheds/huts. If taxes are not payed the housing will be burnet to the ground.

The modern version has a few slight changes, so in most countries it is not custom to burn housing to the ground if property tax has not been payed.

As for the off-grid houses it seems quite illogical that they should be part in paying for things that makes the electrical grid more robust. For areas where there is grid available it could be argued that you have the option to connect to a robust grid at a later stage, but for areas where there is no grid available it seems completely illogical.
To be able to draw a clear line the only reasonable way would be if you are on the grid or not.

On the other hand you could see the grid as a service that is commonly available and should be paid for (or partly payed for) by all through taxes. You could compare this to how hospitals are financed in many european countries. I still don't think this will hold up in court. 

len25's picture
len25
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Joined: Aug 20 2013
Posts: 1
solar tax

I to have an off grid system this new law Is outrageious, so no one is allowed tio store energy in a battery? What about cars, they store energy in the battery, also how about solar garden lights, works on the same system only smaller, this govenment is a dictatorship not a democratic one, I hope the EU will step in somehow and get this squashed.

The observer's picture
The observer
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Posts: 3
Grid-tied or off-grid?

Most solar installations in Europe are grid-tied. This means that the solar-panel DC is converted to AC via a grid-inverter, which is controlled by the grid-frequency (50 Hz in Europe). Without the input of the grid-frequency, the grid inverter doesn't work. The grid inverter operates in a tight frequency range, say 49.5 - 50.5 Hertz, or even at a tighter range. Not only is the solar-system depending on the input of the grid-frequency, but power-companies can also alter the grid frequency and determine in which "areas" the inverter works, or not. This happens in North-Germany were windmills and big solar-fields are "disconnected" if the high voltage power-lines tend to get overloaded. The law, when there is a lot of alternative power available, that power stations should regulate down (i.e. Alternative power has priority) has been, thanks to the power companies lobbyist, overthrown. Instead of regulating down the power-stations, alternative energy gets "disconnected". Windmills are still turning, solar-panels are still producing DC-power, but then for the fun of it!

With a Grid-tied system you are depending on the energy companies and the government. If something some actions are "illegal", they then change the rules to make it legal........it is a simple as that! No point in looking at the EU, they are at the center of the corporation interest.

As for off-grid; batteries are the big bottle-neck; very expensive and in-efficient. To obtain a long battery life there are a lot of operating (drawdown and charging) constrains.

I would love to hear from somebody who has a 24V off-grid system running in Europe.

Irksome's picture
Irksome
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Posts: 10
Hybrid inverter solutions

I am in the US, not Europe.  I have a 10 year old grid-tied PV system, 24 panels on my roof with two really horrible inverters.  I have been researching and shopping for a replacement inverter for a couple years now, looking for a way to have power independent of the grid, but still be grid-tied also.

The only option until recently that I could find was to build a full battery solution, and use an inverter to grid-tie excess production.  But as you mention, battery systems are complex and expensive.

However, I have recently found that the inverter manufacturers have recognized this market, and are offering a new style of inverter.  An example is from SMA, their new transformerless inverters (http://www.sma-america.com/en_US/products/grid-tied-inverters/sunny-boy/sunny-boy-3000tl-us-4000tl-us-5000tl-us.html) have a standard AC plug that is live when the grid is down (and it's sunny, of course!).  No batteries needed!

I don't know if this is an option in Europe, but I look at it as a simple way to create a solar 'emergency generator' for critical loads (refrigerators, battery chargers, electric appliances) when the grid goes down.  In my area (Southern California) my concern is overloaded infrastructure (we had a 12+ hour outage a year ago, and our nuclear power plant has been taken offline permanently) and disasters (wildfires and earthquakes).

Unfortunately, this solution still doesn't really get you to ability to offset your grid usage by your production if the electric company disables your inverter via grid-frequency.  You would have to know that they did that, and then plug into the AC outlet manually, I think.  Perhaps a good electrician could build an automatic switching capability?

Good luck to you!

The observer's picture
The observer
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Island systems

Thank you for your reply Irksome :-)

I have been "studying" Island systems (off-grid) and for example Victron Energy makes high quality inverters/converters for ships (Island-systems). On their webpage you can download a brochure (http://www.victronenergy.com/markets/off-grid) with examples. Convinced that I would build a system, I purchased already a Victron Multiplus 24V/3000W/70Amps inverter/converter. The Multiplus can also steer a SMA grid-tied inverted, however this is a complicated system which I can not explain without becoming very detailed, technical and lengthy. It's a very nice system, but expensive and there is hardly any know-how, even under the Victron-engineers in Europe. In South Africa, where they can not deliver back to the grid, this system is more well known. (Martin Lorton on YouTube:

)

As for batteries; If you type, on the Victron energy website, in the search field: "Energy unlimited", you will find a very, very good PDF brochure about the workings of batteries. It is an eye opener and it will make you realize how fragile they are. (After studying that, re-think the possible future of electrical cars !!)

I was looking into 16x 1.5V OPzS or OPzV batteries, with a life-span of (if you really lucky) 20-years (Max drawdown to 80% of the capacity and max C10 charging current) but it all became so costly that the system exceeded a pay-back time of 20 years, it was more towards 30 years! That is, if nothing goes wrong!! Batteries in the States are a whole lot cheaper, so it may be worth to investigate(?).

As said, I'm stuck due to the battery "bottle-neck" and I can not see the point in a government grid-tied system.

I would love to hear other Island suggestions. If nothing else, I would highly recommend the battery booklet. It's an eye opener!!

silvervarg's picture
silvervarg
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Posts: 57
Re: Grid tied or Island

I believe that one of the main reasons that most systems in Europe and US is grid-tied is that you get a part of the system cost payed for (by goverment or similar) if you follow some rules, and one of them is that it is grid-tied.
Often it states that the system should be grid-tied for 5 or 10 years, so after that it is possible to diconnect from the grid without any penalty.

Producing electricity on a large scale is normally more cost efficient than on a small scale, so from a cost perspective it is often cheapest to just use the grid. As mentioned above this depends on the economic benefits your allowed to use in your country.
If you are going to have the cost of a battery bank that will be hard to make a return on investment on you might want to go completely off-grid as that will save you from the fixed cost of having grid-access. The downside is that you then have to rely entierly on your off-grid system.
Ofcourse if you live far off the grid this could be your only economically realistic way to get electricity.

By having a battery bank and be grid-tied you kind of pay twice, but the benefit is that you can both have the grid and a backup if the grid has a power outage.
If this is what you are looking for the cheapest way is usually to just have a set of batteries and a really good battery charger connected from the grid to them. That is don't get a single solar panel.
If you do get a long power outage you can connect an inverter from the battery bank to what you need to power.
This is cheap, but all you get is some power during power outages.
This depends on how much you depend on allways having electricity and how long you expect power outages to be.

When I did my math on the cost effectiveness I really struggled to see an economic benefit from un installation, so I opted for buying shares in wind-electricity as this was much better from an economic standpoint.
As a complement I installed a really small off-grid solar system with battery, mostly to get practical learning for the entire family and the solar panels are also a great statement for beeing environmental concerned to everyone that passes by the house.
The off-grid system will not be anywhere near profitable, but it does give me some peace of mind and the small battery bank does provide some backup during a power outage.

 

Dutch John's picture
Dutch John
Status: Bronze Member (Offline)
Joined: Oct 10 2008
Posts: 50
Grid feed-in versus off-grid

Home power fed to the grid can be taxed a lot, before break-even with an off-grid system is reached. Grid tied inverters have an efficiency around 97%. Battery systems about 50%. Partly this has to do with the very inefficient absorbtion charge part of the batteries. And when the pack is topped off, solar power is cut and wind power dumped, so lost too. Batteries do not live long enough to have them repayed, even if you baby them carefully. An off-grid system makes you independent? Independent of what? Yes, when one considers power suppliers. No, on behalf of suppliers of hardware like inverters and batteries.

In the Netherlands, a grid tied solar system has a payback time of 7-10 years. Same power, but kept indoors by means of a battery pack: no packback time, because batteries do not live long enough. Note that if you keep the grid connection intact, but do not use it, no costs are charged by the supplier. In fact you get some tax return, because you use so less....

When grid power is available, adding a battery based off-grid system can be considered as an expensive insurance. Or an expensive hobby.....

Regards, DJ

The observer's picture
The observer
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Posts: 3
Grid tied

Hello John;

I'm Dutch too, living in Denmark. You are absolutely right that, in Holland, home power fed into the grid can be taxed a lot before it becomes economically unjustified. But that's in Holland and maybe still in some other places. Denmark and Germany had also very lucrative government deals, which produced high incentives for private people to purchase PV grid-tied systems. However, since 2011, 2012 in Germany and here in Denmark 2013, all those lucrative deals have been greatly reversed. Till last year, it made in Denmark a lot of sense to purchase a PV-system; the grid could be used, Free Of Charge, as a "storage". Excess production went into the grid and could be pulled out, FOC, at a later date. That's all gone. Now you sell it to the grid for 1.3 DKK / kWh (price in 2013, but progressively less in 2014, 2015 etc till 0 kroner in 2020) and if you can not use your own power within 1 hr, you have to buy it back at the current electricity price of 2.3 DKK / kWh (0.31 euro / kWh, 0.42 US$ / kWh). You also only allowed to produce a certain amount; above that threshold you get heavily taxed. If you happen to be without work and on a benefit, the money your PV system generates (the 1.3 DKK/kWh) is seen as an income and taxed accordingly. Doing your math now shows a complete different picture as in the "good old days", pre-2013, and PV is now economically a dead horse. Lots of new companies, who thought PV was the future and invested in it, are going bankrupt now, thanks to the new rules.

There was a very good documentary on YouTube, from the German television ZDF "Energiewende Rückwärts", detailing the corruption, the influence of lobbyist in Bonn and the horrendous impact which the change of rules in Germany had on the PV- & windmill-energy sector. Needless to say, that documentary has been removed. You may want to look at this http://en.wikipedia.org/wiki/Hermann_Scheer and his cause of death (no point intended). These Big Boys seem not to tolerate competition. Reading this blog, the EU PV-noose is tightening in Spain as well. I hope for you that in Holland the rules stay the same!?

Like you said, and I agree, in whichever way the calculations are done, it seems that a battery based system is indeed, or at least here in Europe and at the current prices, economically unjustified. That the EU clearly doesn't want cheap (and btw mostly very high quality) Chinese PV-modules for its citizen, or make PV as unattractive as possible, I like to refer to this article:  http://www.bloomberg.com/news/2013-07-27/european-union-china-agree-on-solar-panel-shipment-deal.html.

They may "talk the green talk" but certainly don't "walk the green walk".

Maybe it is still an idea to invest in PV grid-tied as long as the rules are still favorable, but there seems to be a trend going........

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