The Spanish governments decision to cut back solar energy subsudues, a move which came into force on Octber 1st, may actually help the solar energy sector in Andalucia. The government has decided to reduce by 27 per cent the tariffs paid for electricity generated in photovoltaic plants – something which should drive investors to the areas with most sunshine hours and therefore more cost efficient energy production, i.e. Andalucia. The new energy quotas will also favour rooftop installations over 'solar farms' on the ground.
The Spain has the second most powerful photovoltaic energy production sector in the world after Germany and the new regulations are aimed at making the sector profitable without relying on government subsidies by the year 2015 as well as saving the treasury a lot of money. The tariff paid for electricity generated by solar plants on the ground or on rooftops was 44 cents per kilowatt hour which will fall now to between 32 and 34 cents per kwhour. The annual photovoltaic power quota has been fixed at 400 megawatts; 265 for rooftop installations and 135 for ground installations. In the year 2007 alone 634 megawatts of potential photovoltaic power generation was installed. The higher quota for rooftop installations is intended to promote this kind of system as they are more efficient, producing energy close to where it is to be consumed thus avoiding losses derived from transporting the energy. The lower subsidies should also encourage research and development in the sector as cheaper panel production costs and greater efficiency will lead to higher profits.
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