In 2019, the EU photovoltaic market achieved remarkable results, with an additional installed capacity of 16.7gw. Spain won the top position of photovoltaic installed capacity in Europe with 4.7gw. The top five are Germany (4gw), the Netherlands (2.5gw), France (1.1gw) and Poland (784mw). So how does Spain stand out?

Innate advantage. Spain, located in the south of Europe, is one of the best lighting conditions in Europe, which provides superior preconditions for the development of photovoltaic industry.

Horizontal irradiance rate of European cities

Abolish the sun tax. In 2009, Spain began to strictly control the scale of photovoltaic installation and substantially reduce the grid price, which led to the rapid decline of photovoltaic industry. In 2018, the Spanish government abolished the "solar tax" for self use distributed photovoltaic projects, simplified the project application process, and the demand for photovoltaic installation rebounded. In that year, the installed capacity of self use projects in Spain was 235.7mw, accounting for 90% of the total installed capacity of photovoltaic industry.

Policy support. Spain is committed to 20% renewable energy in 2020, 42% of final energy consumption in 2030, 120gw of installed capacity, 74% of total power generation from renewable energy, higher than the current 38% - 40%, and 100% of power generation by 2050. And close all coal-fired power plants by 2030 and all nuclear power plants by 2035.

In addition, the government has set a photovoltaic installation target of 8.4GW in 2020, 23.4gw in 2025 and 37gw in 2030. In order to achieve this goal, the Spanish government has set a minimum target of auctioning 3gw renewable energy projects (photovoltaic + wind power) every year, and at the same time, transforming the power grid to adapt to the development of renewable energy, increasing 6Gw of energy storage by 2030.

New photovoltaic power sale mode. In 2013, the Spanish government, under financial pressure, cancelled the fixed on grid price of photovoltaic power, and then a new business model was born. The most popular photovoltaic power selling schemes are: selling power to the spot market (omie); selling power to power dealers through PPA. However, the sharp rise of spot electricity price in Spain has contributed to the strong growth of PPA in Spain. As an emerging growth point, PPA appears in the grid parity area, and more and more investors and loan institutions begin to accept private off take agreements.

Dario castagnoli, director of energy management and trade at nexus energy, a Spanish natural gas and power supplier, believes that the spot price of electricity is expected to be between 50 and 55 euros per megawatt hour during 2020-2021, which guarantees a high degree of certainty for the PPA in the first four or five years after signing. "Subsequently, changes in market prices and PV generation costs will determine the profitability of the contract." According to the market transaction price forecast, the ten-year PPA price forecast in Spain is on average 50 euros / MWh, which is between the spot price in the wholesale power market and the levelized power cost of photovoltaic in Spain.

Bidding policy. Spain's bidding policy is different from that of other European countries. The Spanish government will not publicly disclose the settlement price of bidding, and all bidders will get a single price instead of calculating the bidding price. Market analysis shows that the settlement price does not provide actual subsidy incentives for photovoltaic projects, which means that Spain has achieved photovoltaic power generation side parity. Spain's unique bidding policy has become a catalyst to promote the photovoltaic market.