Seraphim Insight: Spain's Self-consumption PV Market is Booming

Based on the data of national grid operator Red Eléctrica de Espa?a (REE) and national PV association UNEF, Spain deployed 4.7GW of Solar in 2021, including 3.3GW of utility-scale grid connections and 1.4GW of self-consumption systems. Residential systems contributed 32% of the total 1.4GW (462MW), 240% higher than 2020. Meanwhile, commercial systems achieved an annual growth of 86%.

The self-consumption boom mainly thanks to the removal of administrative barriers, of which, the Sun Tax in 2018 played an important role. Moreover, Spain’s new tariff structure introduced on June 1, 2020 is also an important factor in the growth of small-scale PV, which intended by the government to shift electricity consumption from hours of maximum demand to when transmission and distribution networks are less saturated. By flattening the load curve, the government aims to reduce the need for new investments in generation infrastructure, and to limit price hikes on the wholesale market.

At present, the main driving forces for the development of PV market in Spain are tender schemes planned by the government and unsubsidized PPA projects. Since 2021, Spain plans to hold at least 3GW renewable energy auction per year, including at least 1GW of PV. The Ministry for the Ecological Transition and the Demographic Challenge (MITECO) planned to hold a 500MW auction on April 6, 2022, of which, the government intends to allocate 140MW of small-scale distributed solar. In 2020, Spain proposed a scheme (Economic Regime of Renewable Energies (REER) ) to support the development of at least 10GW of solar by the end of 2025. The auction in April was the third round under the scheme. The first round was held in January last year, and 2GW was awarded to solar, and the second round on October 19 which awarded 866MW to solar. We expect Spain will add more than 5GW of solar in 2022.