Spain has decided to proceed ahead with its plans to cut prices for solar power. The decision was taken after talks on broader changes to renewable energy subsidies broke down last week. As a result, prices for power from ground-based panels may be cut by 45 percent while photovoltaic generators mounted on large roofs face a 25 percent reduction and plants on small roofs will see a 5 percent cut. This may effect the existing plants as well as the ones yet to be built (news not yet confirmed).
Protest have been forthcoming especially from funds that have money invested in solar farms in the country; funds including London-based HG Capital and Denmark’s AP Pensions have argued that the government is reneging on its legal obligation to maintain the subsidies for 25 years.
The Spanish Banking Association estimated domestic banks have loaned 40 billion euros to renewable-energy projects; expecting some 600 photovoltaic plant operators may face bankruptcy if the subsidies are cut.
Do we see something similar occuring in India, maybe in the next 5-7 years? Could be. This again reinforces the integrated approach in solar business.