Evolution of the cost and economic profitability of grid-connected PV investments in Spain: Long-term review according to the different regulatory frameworks approved

Abstract

Spain has shifted from a predominant position in the worldwide market according to the accumulated PV power installed, to an irrelevant level where it is even no longer present at the PV market survey; but not always this has been the situation. The Spanish Government have promoted renewable energy policies which have turned very rapidly from a promising scenario, especially in the 2004–2008 period, into an unstable situation not only for future investors in this technology, but also for current owners that have been witnesses of a decrease in their profitability expectations. Furthermore, although the retroactive measures that have been applied to the owners of these PV plants could be, paraphrasing the Government words, “reasonable profitable”, the problem arises when they may be unable to afford the annual liquid assets of the funding mechanism chosen for their PV investments. Therefore, in a scenario where in the last decade more than 12 laws and Royal Decrees have been promulgated in Spain, it is interesting to review the effects in the profitability and cost parameters that this legislation has had on the PV market, on the owners and also on prospective investors. In this paper a complete economic profitability and cost analysis based on the NPV, IRR and LCOE has been undertaken for the case of Spain since 1998, correlating it to the evolution of the legislative framework applicable to the photovoltaic technology.