Spanish Government faces Lawsuits over Solar Feed in Tariff Cuts from ASIF

The Spanish Government faces multiple lawsuits over its Royal Decrees which cut the Feed in Tariff for Solar PV Installations Retroactively.These laws were passed in Dec 2010 as part of the comprehensive review of the Renewable Energy Subsidies by the government.While Wind Energy and Solar Thermal Subsidies were changed earlier,the controversy over the Solar PV subsidies had forced the government to delay the change to the last minute.These changes were strongly opposed by the Solar PV Industry Association ASIF which has earlier called the measure as “industry killing”.These cuts over the next 3 years would be done through a “backdoor approach” in which the subsidies would be restricted for a only a few hours for the Solar PV plants.

Note this measure has generated a massive amount of heat with some pension fund investors threatening to abandon Spanish government debt.While lawsuit threats were also given,the Spanish government (facing huge problem on the fiscal front as its bond yields increaseing) change the FIT law adversely for Solar PV investors.This has led to huge problems for the investors and the banks financing these investors.While massive bankruptcies over the cuts may be exaggerated,the problems for small investors is definitely dire.The spirit of the law seems to have been broken if not the exact wording.With European Commission getting involved,this will lead to further headaches for the Spanish government.

Spain’s Solar Sector Sues Government Over Retroactive Tariff Cuts

Spain’s struggling solar-power sector has announced it will sue the government over two royal decrees that will reduce tariffs retroactively, claiming they will cause huge losses for the industry.In a statement, leading trade body ASIF said its 500 members endorsed filing the suit before the Spanish high court and the European Commission. They will allege that royal decrees 156/10 and RD-L 14/10 run against Spanish and European law.The former prevents solar producers from receiving subsidized tariffs after a project’s 28th year while the latter slashes the entire industry’s subsidized tariffs by 10% and 30% for existing projects until 2014.Both bills are “retroactive, discriminatory and very damaging” to the sector. They will dent the profits of those companies that invested under the previous Spanish regulatory framework, ASIF argued.