Spain scraps “sun tax,” moves to boost solar self-consumption

Following through on a move that was first hinted at in June, the Spanish government has put an end to the much-reviled “sun tax” which had imposed a levy on solar self-consumption.

The change was approved by Spain’s Council of Ministers early this week, after being submitted by the country’s Ministry for the Ecological Transition, headed up by Teresa Ribera.

The legislation was first introduced – by Royal decree – back in 2015, by then-Spanish minister of industry, energy and tourism minister Jose Manuel Soria.

The move, which would tax the installation of self-consumption systems such as rooftop solar – leading to its nom de guerre, the “sun tax” – was opposed then, and has been opposed throughout the three years it has been in place.

However, with a new Spanish government comes a new Minister of the Ecological Transition, Teresa Ribera, who this week successfully introduced a package of measures to boost the country’s transition to a low-carbon economy, including the elimination of the “sun tax” and other rules which have prevented renewable energy and electric vehicle adoption.

The move comes as part of a larger initiative to reduce the country’s high electricity prices.

First floated in June in response to the European Parliament’s request for Spain to ban the “sun tax” and any obstacles to solar self-consumption – and following the country’s announced desire for a more ambitious 2030 European Union renewable energy target – the new flotilla of legislative measures include a series of rules intended to smooth the development of solar.

Spain is known as a beautifully sunny country, but its solar industry has lagged behind its national peers due in part to the imposed legislation on self-consumption – the ability to consume your own electricity as you produce it, ie, through solar panels.

The new rules include simplifying procedures for registering new power generators for self-consumption (those not exceeding 100 kW in size); the right to self-consume energy for community renewable energy projects; and removing all costs imposed for self-consumed power.

“The photovoltaic sector applauds the elimination of charges to self-consumed energy that does not pass through the network, popularly known as ‘sun tax’,” said the Unión Española Fotovoltaica (UNEF), the country’s solar PV trade body.

The new suite of measures also includes the temporary elimination of a 7% tax on electricity generation and an exemption on the Special Hydrocarbons Tax, as well as expanding public recharging points for electric vehicles.