September 2013        

Spain taxes the sun!

The commitment of neo-liberal governments to environmental protection hinges, in the end, on the economic interests of forces whose interest in such protection is nil, based as it is on the effect of its costs on capitalist profit margins. So, when the availability of energy from renewable sources begins to bite into the profit margin of major oil and natural gas suppliers, the latter are not slow to demand that governments take measures to ensure that their margins are protected.
     Take the case of Spain. Solar power is now seen as a threat to both the energy industry and the Spanish economy. So citizens with sun panels on their rooftops are now being targeted by the Spanish authorities as anti-social freeloaders. They are being threatened with draconian taxes to dissuade them from generating power from a renewable resource: the Sun.
     Never mind that the neo-liberal Rajoy government’s crackdown is contrary to an EU directive, passed last October, which compels member-states to employ innovative technologies in order to reduce energy consumption by 20 per cent by 2020!
     Solar power is a logical energy option for Spain. Returns from tourism and agriculture may fluctuate, but the sun always shines. Some southern parts of the country have almost 3,000 hours of sunlight per year. So, in the late 2000s, when Chinese production came on line and the price of solar panels fell, the Spanish government was active in encouraging people to install panels in houses and businesses. It increased the price it paid to users of solar power for selling excess power back to the national grid. The price paid was increased to €444 per megawatt-hour, as compared with the €39 per megawatt-hour paid for electricity generated from conventional sources, such as coal and natural gas.
     This plan attracted a 500 per cent increase in solar photovoltaic (PV) installations in the first year of the policy. Now, six years later, Spain has a PV capacity 60 per cent more than the oil barons would like, and their displeasure has been made known to the government. The latter, to add to its woes, has an enormous hole in its finances, created by the uncontrolled subsidies it paid out as the costs of PV plummeted and installation and solar generation rocketed upwards. Along with subsidies it paid out to other renewables besides PV, the Spanish government is now left with €26 billion in deficits created by its energy policies since 2007.
     Mariano Rajoy’s government ended these subsidies last year and began cutting assistance to renewable projects generally. The fall-out from these measures could leave the industry with a €20 billion hole in its pocket as the government attempts to stop renewables’ runaway growth.
     As part of the restrictions designed to throttle further excess capacity and financial deficits, consumers generating solar power from their own installations are to pay 27 per cent more for power from the national grid than non-renewables. The government also intends to levy a fine of between €6 and €30 million on any person caught generating their own solar power on panels not connected to the grid. Home solar generation that isn’t hooked up to the power networks and doesn’t pay the higher rates will be subject to this laughably draconian fine. Unmetered back-yard solar generation is now considered thievery under the new measures.
     Opinion is divided about whether the massive fines prescribed in the most recent law will be enforced, as they were created with industrial-scale producers in mind, not individuals. PV users have two months to comply with the new regulations.
     Responses to these outrageous measures are varied. Some citizens rip panels off their rooftops rather than complying; some just ignore the law; others have turned to theatrical-type protest. Still others have shifted their panels to the remote countryside, far enough from main power lines to be exempt from the tax.
     A group that includes unions, utilities, political parties and industry groups submitted a complaint against the government to the EU Parliament in the summer, citing the retroactive nature of some of the cuts and penalties as a clear violation of EU rules. Meanwhile Rajoy has managed to alienate everyone, from rank-and-file voters to banks and utilities. An estimated fifty thousand jobs in renewable energy have already been lost.
     Is the Spanish case a forerunner of what could become the norm all over Europe, when energy from renewable sources threatens to reduce the profits of the sellers of energy from non-renewable sources?

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