Spain takes the axe to solar power subsidies, again
(ADPnews) – Dec 28, 2010 – Madrid made an unpleasant Christmas present to solar power investors in the country announcing last Thursday it plans to cut subsidies for photovoltaics by about 30% from last year’s EUR 2.75 billion (USD 3.64bn).
As part of a law aimed at reducing the cost of power, Spain is targeting savings of EUR 4.6 billion over three years. Besides photovoltaics, the country also plans to temporarily reduce wind power subsidies, Reuters reported.
The biggest concern for investors in the EUR-20-billion worth solar power industry, including many foreign private equity firms and investment funds, is the potential imposition of retroactive cuts on facilities built before 2008.
Such a move would be an open violation of long-term contracts and will practically drive many of them into bankruptcy and loan defaults that would hit the banking sector too, Juan Laso, president of the country’s Photovoltaic Business Association, warned.