Sun not shining on self-solar in Spain

Yesterday’s WSJ highlights the growing reality in Spain for homeowners who shelled out thousands of euros to install solar panels on their rooftops:

MADRID—Spain’s effort to shore up its public finances is about to further squeeze a small but growing segment of the middle class: people who have joined a Europe-wide move toward self-sufficiency by installing solar panels in their homes and businesses.

Diego Nicolás is one. By generating much of his own electricity, the 55-year-old auto mechanic thought he could lower his shop’s energy bills enough to recoup the €42,000 ($57,000) investment within eight to 10 years.

But that was before the government in July decided to levy a fee on renewable-energy production for personal use. The measure, which is expected to win parliamentary approval and take effect Jan. 1, will raise his costs so much, Mr. Nicolás said, that he won’t recover the outlay for about 16 years.

The fee is the latest reversal for Spain’s renewable-energy industry after years of government incentives. It comes despite official assurances that the economy is starting to pull out of a long recession and that tax increases and other austerity measures would become less onerous as a result.

“Now we’re afraid to make decisions, to invest a single euro,” said Mr. Nicolás, adding that he felt blindsided. “They take away laws, they put in new laws, prices change. It’s like being in a bullring with four doors and not knowing from which one the bull is going to charge.”

Since Spain authorized self-production in late 2011, solar panels have been installed in as many as 5,000 homes and businesses across the country, people in the industry say. Some had been predicting that the estimated output, now less than 0.1% of the country’s total, would grow tenfold by 2020.

The new levy puts those expectations in doubt. Households and businesses that stay connected to the grid for some of their electricity will also be charged a fee based on the power they generate for themselves. The fee is high, surpassing the wholesale price that Spain’s electricity-market supervisor pays gas power plants for the electricity they generate.

The fine for an individual producer who fails to register or pay the fee is even higher—up to €30 million, the equivalent to what a nuclear-power producer might pay for a radioactive leak that endangers public safety.

Spain’s energy minister, José Manuel Soria, has defended the fee and the fine, saying the government must ensure that individuals generating their own power help cover the fixed and operating costs of an electrical grid they would still need when the sun doesn’t shine.

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