Solar Industry Learns Lessons in Spanish Sun
New York Times / Elisabeth Rosenthal / 08 March 2010
In its haste to create a solar industry, Spain made some miscalculations: solar plants can be set up so quickly and easily that the rush into the industry was much faster than anticipated. And the lavish subsidies inflated Spanish solar installation costs at a time when they were rapidly decreasing elsewhere — in part because of increasing competition from panel makers in China, but also because higher volumes produced economies of scale.
In Spain, the tariff, now adjusted quarterly, is about 39 cents per kilowatt-hour for electricity from freestanding solar power plants, and slightly higher for panels on rooftops.
Germany’s tariff, 53 cents per kilowatt-hour, is expected to fall at least 15 percent this summer, and there are proposals before Parliament to eliminate subsidies for solar plants on farmland.
The bonus payments required to make solar energy financially viable vary, depending on local sunshine and the cost of conventional energy. Experts predict that, possibly by next year, Italy will be the first place where solar-generated electricity will not need subsidies to compete with electricity from fossil fuel. Italy has abundant sun and sky-high energy rates, given that it imports most of its fossil fuel.
Even with the reduced incentives and local economic downturn, the solar industry gave Puertollano something of a face-lift and, potentially, a new economic future. Research institutes there are developing cutting-edge technologies. Unemployment, though now up around 10 percent, has not returned to the 20 percent figure. The city is home to a number of solar businesses: a new 50-megawatt thermal-solar plant owned by the Spanish energy giant Iberdrola created hundreds of jobs.
