Electric energy: our right

The so called in Spain “Sun tax" is already dead. After years of political, legal and social battles, on Friday, October 5th, the Government of Spain has eliminated it. The doubt that remains is, what happens now?

I have examined the Royal Decree 15/2018, of October 5th, on urgent measures for the energy transition and the protection of consumers, and have attempted to analyzed the keys items of energy self-consumption in Spain. Something that does not end with the repeal of the " Sun tax", but just started.

The sun tax is dead. Long live PV panels.

Until now, when we spoke of 'self-consumption', the image that came to our mind was, basically, solar panels on the roof of our single-family house. And it was for good reasons, when self-consumption was regulated in 2015 that it was expressly forbidden that the same facility could be used by several neighbours of the same building.

It was not an anecdotal decision as about 67% of all Spaniards live in blocks of flats. So prohibiting shared self-consumption reduced the playing field in a very important way. After two years of legal battle, the Constitutional Court annulled that prohibition on June the 2nd of 2017. The new legislation includes this right to shared self-consumption and changes its definition to include it within. In addition, and this is very important, from now on it will not be necessary for the installation to be inside the same building, it is enough for it to be close to the consumers. In this way, the neighbourhood communities will have much greater capacity (and flexibility) when it comes to betting on shared self-consumption.

The administrative hell of paperwork

Although shared self-consumption was once again legal, nonetheless that did not make it achievable. As we already heard in August of this year, the first shared installation in the country had needed a year of paperwork and bureaucracy for an administrative authorization that, on paper, would have required a couple of weeks.

Therefore, the key change in this reform was the part that affected the dreaded paperwork, bureaucracy and administrative procedures. And this Decree has decided to cut it off: only large facilities that are going to pour electricity into the grid must ask permission from the electric companies to connect. Domestic facilities are exempt from this requirement, something that together with the specific meter for self-consumption and the end of the obligation to sign up for self-consumption records simplifies the process.

No more charges, no more tolls

This is another of the central themes of the decree, the prohibition to establish charges or tolls to all renewable energy that is going to be self-consumed. Although it is true that for domestic installations this has no real effects because in those cases the "sun tax" was not charged, it solves the biggest problem we had until now: the insecurity derived from not knowing when to start taxing the domestic self-consumption.

With this prohibition, the implicit threat that this entailed is alleviated and the foundations are laid to commence ant necessary investments. However, the political instability in which we live plays against the decree. Nobody knows if there will be an advance election in this country in the next few months and, who knows, if we will return to the previous legislation.

Reasonable sanctions

There are many more novelties that have to do with the net turnover of surpluses or the "battery tax", that tried to penalize the change of power, but the last fundamental axis of the decree is the arrival of common sense to the sanctioning regime. With the previous regulation, the penalties could reach 60 million euros. Now, with the new decree, the sanction can never exceed 10% of the consumer's annual bill. This, as the experts agree, also helps to reduce the uncertainty regarding self-consumption facilities and, predictably, facilitate their expansion.

As I have written in previous articles for CBN, the "sun tax" was not a tax in the strict sense. It was rather a set of measures that sought to discourage self-consumption of energy. And the almost 1100 days of "tax" seem to have worked: in Spain there are barely a thousand self-consumers, compared to the long million that exists in Germany.

The government's great challenge is not to withdraw the "sun tax", but rather to aid self-consumption effectively. And even more in a political context as unstable as the current one. It does not seem easy. Above all, because seriously betting on renewable energy entails, above all, addressing the reform of the electricity grid. It still remains, but whatever it may be, this seems to be an extremely good step forward.