The Spanish PV market will be one of the major PV markets in the world in 2006 and in the future with a guaranteed feed-in tariff for produced solar energy
A further growth of at least 40% per year is being predicted for the coming years
The Spanish PV market is relatively young and open to new business development
SolarPlaza has concluded in its market report (2005) that the Spanish PV market is financially attractive, has a large potential and is still in its infancy. It is therefore attractive for companies to enter the PV sector, start activities in the Spanish PV market and to expand existing PV business activities.
The Spanish PV market is still in its infancy, but is growing at a fast rate and has the potential to become one of the worlds most important PV markets. The almost perfect climate conditions, the extraordinary financial incentives (nationally and regionally) and the availability of low cost installation space has created excellent conditions for rapid growth for the most important market segment: privately owned ground-based systems.
Spanish PV Market research major findings
As part of the European Union, Spain provides a modern economy with good opportunities for investment and business cooperation. Spain has 17 autonomous regions. The culture and language present in this region can differ as can the PV supportive programmes. We cannot, therefore speak of 'the Spanish PV market'.
The PV market in Spain started to grow with the introduction of an attractive national feed-in tariff in 2003. At least 10 MW were installed in 2004 and the market expects a continued growth of at least 40% for 2005 (13-20 MW). The governmental targets published are to install 135 MW cumulative PV power by 2010 of which 115 MW should be grid connected and 20 MW should be off-grid PV systems. Achieving these targets would require a market growth of at least 24% per year with yearly sales growing from 70 to nearly 150 million euro by 2010. The report indicates there are reasons to assume an even higher growth in the coming years. A reason for the continued success is the feed-in tariff which has been secured for the realisation of 150 MW. Recently, the government approved the new target of 500 MW which will leave room for several years of continued market growth.
The well represented Spanish Solar Industry Association (ASIF) is lobbying for an even more aggressive growth plan which should lead towards 1000 MW cumulatively installed PV power by 2010.
Spain has extensive financial incentives that stimulate the use of PV systems. Apart from national grants, soft loans for PV systems and tax deduction for loans, the 17 autonomous regions provide their own additional PV grants. In 2004, these grants could be combined with the feed-in tariff, leading to extremely attractive investment opportunities. The only problem with the financial incentives is the restrictions laid down regarding the yearly budgets which lead to customers postponing their investment in PV in the hope that subsidies will become available at a later date. This despite the fact that the feed-in tariff alone could lead to a financial yield of 8% per year.
Solar Plantations
The application dominating the Spanish PV market nowadays is ‘solar plantations’ (in Spanish: huertas solares). This is a free area with a large group of privately owned, centrally serviced, grid connected and tracking PV systems (5-6 kW). Offered with 8 years of payback time and a financial return guaranteed in 25 years, these systems were responsible for at least 50% of market sales in 2004. Consequently the dominating inverters in the market are in the power range of 2.5 - 5 kW.
The off-grid PV market is strongly dependent on regional financial support. At least 9 MW will be needed to achieve the government targets for 2010 in the coming years. The number of market players is still low. There is one dominant company and 12 other companies with a turnover of more than 3 million euros. Market development differs per region, depending on regional grants and the activities and initiatives of regional PV companies. Of the 15,000 electrical installers in Spain, more than 500 companies (recently) became involved with PV sales and installation services.
