When complete, the project, to be located in the area of Calera y Chozas, in the Toledo province, is expected to feed the generated electricity back into the Spanish grid at the going market rate. It will receive no FIT and, therefore, be competing with the traditional energy sources.
The Spanish solar company will undertake EPC services and supply its photovoltaic modules to the project, which will cost around 60 million. "Thus, Solaria shows its commitment to the Spanish market where the grid parity is becoming a reality and where PV energy is already a mature technology, capable of compete with traditional energy sources," it said in a statement released.
The company could not be reached for further comment.
Back at the start of April, Gehrlicher Solar announced it wanted to realize a 250 MW photovoltaic plant in Spain without any FIT or economic incentives. It is expected to start construction in the second half of 2013, and finish by 2015.
A crystalline silicon installation in Southern Europe, including Spain, has an approximate energy payback time of 24 months, when taking into account 1,700 kilowatt hours per square meter of irradiation annually.
Moratorium
In January, the Spanish government suspended subsidies for renewable energy. To date, it has yet to indicate how long the moratorium will last. Nonetheless, as Oliver Ristau writes in this month's pv magazine, it had an immediate negative impact, particularly on the photovoltaics industry.
He wrote: In contrast to renewable energies such as wind or concentrated solar power, payment of feed-in tariffs for new photovoltaic installations was stopped immediately. The moratorium could last up to the year 2016, according to the draft from the national energy commission Comisión Nacional de Energía (CNE). An initial estimate of the consequences of the new policy suggests a halt to installations over the next four years an increase up to 4,177 MW is possible by the year 2013 (compared with 3,985 MW at the end of 2011), only to then stagnate until 2015. This forecast is only to be taken as an estimate, because projects like the one planned by Gehrlicher were not taken into consideration.
"We anticipate that two different directions will crystallize on the market following the disappearance of any financial incentives," indicated Sonia Gomez Borges, communications manager at Gehrlicher España, when talking with pv magazine. Apart from systems for self-consumption, there will only be "large-scale installations which, because of the required capital, will only be able to be realized by large companies" in the future. Gehrlicher cites the investments for 250 MW as amounting to 250 million, whereas the financing is still an open question. "We are currently negotiating with a number of financial establishments that have expressed interest in taking part."
"In the meantime, however, under optimum conditions solar electricity can be produced for between six and seven cents per kilowatt hour," calculates Robert Kröni, managing director of Swiss engineering company, Jendra Power. The basis is a purchase price of 53 cents per watt peak for the modules, thus resulting in a quite attractive return on total capital employed of between 5.0 and 5.5 percent. But this calculation is not without risk.
"The main obstacle at the moment is the fluctuating electricity market price in Spain which makes a calculation of overall returns for 25 years difficult," says Kröni. The sales of green electricity certificates for clean energy may help when it comes to calculating profitability, but this market, he says, is still standing "on shaky legs."
All in all, however, Kröni is enthused about the "pioneering development toward grid parity prices" in Spain that has apparently captured the attention of increasing numbers of developers. "We know that companies are thinking about realizing already planned PV projects without a feed-in tariff in the future," confirmed Alberto Sanromán, general director of Madrids solar distributor Albasolar, to pv magazine. But they also do not have much of a choice.
Read the full article in the June edition of pv magazine.
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