Spain’s Solar Market Crash Offers a Cautionary Tale About Feed-In Tariffs
August 19, 2009
For a brief, shining moment, Spain was the best solar market in the world. Unlike in cloudy Germany, the sun bakes Spain’s southwestern provinces — the brown, hard-packed Extremadura and Andalusía — on the Mediterranean coast. And the Spanish government, eager to fulfill its commitments to renewable energy, guaranteed generous subsidies for any company that met its aggressive deadlines.
While the ministry expected a steady stream of investment, it got a flood, accounting for more than 40 percent of the world’s total solar installations last year. Forced to revise the subsidies — known as feed-in tariffs — that it used to spur photovoltaic power last fall, Spain became one of the principal causes of the downturn in the solar industry. And its faulty regulations have become a watchword for how government renewable-energy programs, poorly conceived, can go awry. To read more, go here.