This is an extract from a recent report “National Survey Report of PV Power Applications in SPAIN 2023” by IEA.
The targets for photovoltaic (PV) energy in Spain are outlined in the “Integrated National Energy and Climate Plan” (PNIEC). The 2023 update of the PNIEC, published in September 2024, sets the following targets for 2025 and 2030:
• Total PV target for 2025: 46,5 GWn
• Total PV target for 2030: 76,3 GWn
• Self-consumption PV target for 2030: 19 GWn
• Centralized PV target for 2030: 57,3 GWn
Direct support policies for PV installations
A limited feed-in premium scheme remained in place for some legacy projects, particularly for centralized solar installations. Approximately 6 GW of PV capacity was still benefiting from this premium scheme.
Mandatory solar
In Spain, while there is no nationwide mandate requiring the installation of photovoltaic (PV) systems on residential buildings or car parks, certain regional and municipal regulations have been implemented to promote solar energy integration. This is the case of Balearic Island, whereas the Balearic Islands´ Renewable Energy Law (2019) have enacted legislation requiring new large car parks to install solar panels, aiming to enhance renewable energy adoption and reduce carbon emissions. The European Union’s Directive (EU) 2024/1275 mandates the installation of PV systems on new buildings as part of its strategy to enhance renewable energy adoption and improve energy efficiency. The directive requires that all new public and non-residential buildings with a useful floor area of over 250 m² must include solar installations by December 31, 2026. By 2030, this obligation will extend to all new residential buildings, contingent upon economic and technical feasibility. In Spain, the transposition of this directive into national law is underway, requiring updates to existing building codes and regulations.
Merchant PV development measures
In Spain, the development of merchant photovoltaic (PV) projects—those not relying on traditional subsidies or long-term Power Purchase Agreements (PPAs)—has been primarily driven by the country’s marginal pricing system. This market mechanism, where the most expensive technology sets the reference price in the wholesale market, has made PV projects highly attractive due to their low production costs, allowing them to benefit from elevated market prices. Merchant PV projects have benefited from fiscal incentives such as accelerated depreciation and reduced taxes under updated regulatory frameworks (by updating RD-L 23/2020). Additionally, guarantee funds, supported by initiatives like InvestEU, provide financial backing to de-risk investments in merchant projects, encouraging greater private sector participation.
Self-consumption measures
The primary support mechanisms for self-consumption PV installations in Spain during 2023 were regional capital subsidies (phased out by year-end) and income tax credits. New initiatives focused more on encouraging self-consumption and prosumer participation rather than reintroducing discontinued schemes like feed-in tariffs. Capital subsidies for PV installations were available in the residential and commercial sectors throughout most of 2023. However, these subsidies were phased out by December 2023 in most regions. The subsidies covered both the installation of PV systems and, in some cases, included support for battery storage solutions. Various regional programs provided income tax credits for investments in PV systems, particularly for residential projects. Notable regions with active tax credit schemes in 2023 included Murcia, Valencia, and Navarra. These credits were aimed at incentivizing private investments in renewable energy. Several pilot projects and demonstration programs were active in 2023, focusing on innovative applications of PV technologies, such as collective self-consumption and delocalized net-metering. These programs were supported by the IDAE and other regional bodies, with continued funding into 2024.
Support measures for self-consumption
Spain has implemented various support measures to encourage the adoption of selfconsumption solar PV systems:
• Capital Subsidies: The Spanish government, through programs like the Next Generation EU funds, has provided subsidies to offset the initial costs of installing solar self-consumption. These subsidies have been available for residential, commercial, and industrial sectors, though many concluded by December 2023.
• Tax Incentives: Homeowners and businesses investing in solar installations can benefit from deductions in the Personal Income Tax (IRPF). These deductions vary by region and are designed to make solar investments more financially attractive.
• Net Billing and Self-Consumption Frameworks: Spain has established favorable regulations for self-consumption, allowing surplus energy generated by solar PV systems to be fed back into the grid, with owners receiving compensation. This framework promotes the economic viability of solar installations.
Collective self-consumption, community solar and similar measures
National Aid for Energy Communities
The Institute for the Diversification and Saving of Energy (IDAE) has announced the new call for proposals on its website under the national “CE Implementa” program, an incentive scheme aimed at supporting unique pilot projects for energy communities. The first call was launched in 2022, and the Fifth and Sixth Calls are currently open for applications. In 2024, this programme opened two new calls: The fifth call target small projects with an investment up to 1.000.000€; The sixth call aimed to bigger projects, with investments over 1.000.000€
Regional Aid for Energy Communities
In 2024, five autonomous communities introduced subsidy programs and aid schemes to support energy communities and collective self-consumption projects:
• Canary Islands: Grants to support the creation and operation of energy communities, application period ran from September to November 2024 (now closed);
• Navarre: financial aid for energy communities focused on the energy transition, with applications open from May to June 2024;
• Catalonia: SOLARCOOP program provided aid for cooperatives and citizen associations to develop energy community models, available from May to June 2024
• Galicia: Grants for energy planning for local entities and energy communities (IN418E), application period was from January to May 2024.
• Valencian Community: Support for renewable energy communities and collective selfconsumption installations, applications accepted from May to June 2024.
Tenders, auctions & similar schemes
Renewable Energy Economic Regime (REER auctions)
In 2020 the Renewable Energy Economic Regime (REER) was introduced in the Spanish market. This regime is an auction-based scheme based on the recognition of a long-term price for the energy generated. In January 2021, the first auction was held, offering 3.000 MWac in a mixed scheme between technology-neutral and specific auctions with a quota of 1.000 MW for photovoltaic, another 1.000 MW for wind power and 1.000 MW technologically neutral. In this auction, 2.034 MW were allocated to photovoltaic, at an average price of 24.5 €/MWh. Projects were to be developed and operative by 2023. In October 2021 the second REER auction offered 3.300 MWac of new capacity. This auction defined quotas of 700MW for PV, 600 MW for “accelerated availability” (photovoltaic and wind) and 300 MW for local distributed photovoltaic.
In addition to these quotas, 200 MW were allocated on a technology-neutral basis and without conditions. In this second auction, 838 MW was allocated to the PV quota, 22 MW to PV from the “accelerated availability” quota, and 6 MW to local distributed PV. The average price for solar PV was 31.6 €/MWh. In October 2022, the third auction was held, offering 500 MWac, of which 140MW were allocated to local distributed PV. Out of a total of 140MW, only 31 MW were awarded to 6 companies. The average price awarded in PV was 53.87 €/MWh, significantly higher than that of the two previous auctions, due to the evolution and prospects of electricity market prices and electricity futures prices. Finally, in November 2022, the fourth REER auction offered 1.500MWac for wind power and 1.800 MW for solar PV. With a reserve price of around €45.12/MWh, the photovoltaic quota ended empty. This may have happened due to the high reserve price set by the government (45,12 EUR/MWh), which was well below the sector’s expectations (60 EUR/MWh), added to elevated merchant prices and high inflation rates. No new tenders were conducted in 2023.
Utility-scale measures including, floating and agricultural PV
Innovative Renewable Energy Program
In 2024, the Institute for the Diversification and Saving of Energy (IDAE) launched the Innovative Renewable Energy Program, providing financial aid for projects focused on renewable energy innovation, energy storage, and the implementation of renewable thermal systems. This initiative is part of the Recovery, Transformation, and Resilience Plan, funded by the European Union’s NextGenerationEU funds The objective of the Innovative Renewable Energy Program is to drive forward the decarbonization and energy transition in Spain by promoting innovation in renewable energy technologies and storage solutions, as well as supporting the implementation of renewable thermal systems. The program aims to enhance energy efficiency, foster sustainable practices, and integrate advanced renewable technologies, contributing to the broader goals of the European Union’s Recovery, Transformation, and Resilience Plan. The program provides funding for the following eligible actions:
• Innovative projects for collective self-consumption with integrated energy storage, including initiatives that involve vulnerable consumers.
• Installations of renewable heat pumps aimed at increasing energy efficiency in heating and cooling systems.
• Agrovoltaic systems incorporating energy storage solutions, combining agricultural use with solar energy production.
• Floating photovoltaic systems installed in artificial water bodies, paired with storage capabilities to enhance energy generation and grid stability.
• Integration of renewable energy and storage technologies within existing infrastructure, focusing on maximizing the use of clean energy sources.
Retroactive measures applied to PV
In 2024, new taxes on photovoltaic (PV) energy have been introduced, affecting both ongoing projects and projects under development.
• Aragón: In May 2024, a new law was approved in Aragón establishing environmental taxes on wind farms and photovoltaic (PV) parks, as well as amending the existing environmental tax on high-voltage electricity transmission facilities. This is a new, extraordinary, and specific tax that environmentally taxes PV installations, despite lacking a clear justification. Additionally, by taxing the total surface area of photovoltaic plants instead of the area covered by the panels, the law penalizes projects that include environmental measures such as ecological corridors, which contradicts the goals of sustainability and the energy transition.
• Basque Country: The Basque Country has enacted the Energy Transition and Climate Change Law, which imposes a retroactive tax on renewable energy projects with a capacity of 5 MW or more. The law mandates an annual fee for renewable installations, including wind farms and photovoltaic (PV) solar parks. This fee is based on the assessment of visual and environmental impacts on the natural surroundings.
• La Rioja: La Rioja introduced a tax on photovoltaic (PV) energy by 2025, alongside a moratorium on new authorizations for electric power installations. This measure affects projects currently under review and is expected to cause a slowdown in the sector by discouraging future investments.
• Canary Islands: A new law has been enacted requiring mandatory local participation for new renewable energy projects. This legislation mandates that developers must demonstrate at least 20% local ownership (by residents or businesses in the municipality where the plant will be located) for new renewable generation projects exceeding 2 MW. If the 20% local participation target is not met by residents or businesses within the municipality, the opportunity must be extended to the entire island’s inhabitants or companies.
Grants for Innovative Energy Storage Projects:
Storage Hybridized with Renewable Energy: In December 2022, the Institute for Energy Diversification and Saving (IDAE) launched the first call for grants for innovative energy storage projects hybridized with renewable energy generation facilities. This call, part of the Recovery, Transformation, and Resilience Plan, aims to promote projects that integrate storage with renewable generation to enhance system management and stability.
Independent Electric Storage and Thermal Storage: In July 2023, Order TED/807/2023 was approved, establishing the regulatory framework for granting aid to innovative projects for independent energy storage and thermal storage. This initiative, also part of the Recovery, Transformation, and Resilience Plan, seeks to promote storage technologies that operate autonomously or in thermal applications, contributing to the flexibility and efficiency of the energy system.
National Integrated Energy and Climate Plan (NECP) 2023–2030: In September 2024, the Spanish government approved the updated PNIEC, which sets ambitious targets for renewable energy integration and energy storage development. The plan includes the installation of 22.5 GW of storage capacity by 2030, covering batteries and pumped storage systems, to ensure grid stability and security of supply.
Energy Storage Strategy: The Ministry for the Ecological Transition and the Demographic Challenge has developed an Energy Storage Strategy identifying challenges and opportunities in this sector. The strategy outlines measures to ensure the effective deployment of storage, assesses system needs, and sets targets to support the decarbonization of the energy system.
Other support measures
The European Commission (EC) has presented 2 measures that will have an impact on the photovoltaic industry in Spain: The Net-Zero Industry Act (as a response to the US Inflation Reduction Act) and the REPower EU (as a response to the energy dependence). The Net-Zero Industry Act proposal aims to boost the production capacity of renewable energy technologies in Europe. This proposal seeks to facilitate financial, administrative and regulatory support for the rapid deployment of clean technologies in Europe. The proposal sets targets for different technology sectors, including a 40% scaling-up effort in solar photovoltaics. Also, the EC launched the REPowerEU Plan to curb price volatility and the dependence on Russian fossil fuels. The plan proposes measures on energy savings, supply diversification and increasing renewable energy by 2030. Solar PV is presented as a key tool to meet the targets set by the REPower EU Plan, increasing technology deployment rates by 20%. This roadmap aims to accelerate the deployment of renewable energies, surpassing the target previously set by the “Fit for 55” package by increasing the share of renewable energy sources in the EU energy mix from 40% to 45%.
Financing and cost of support measures: Specific remuneration regime is financed through charges in the electricity tariff, only a few MW remain under this remuneration regime (RECORE). Grant subsidies are partially financed thanks to the European Regional Development Fund of the EU. Local taxes exemptions are financed by the municipalities.
Grid connection policies: In Spain, Royal Decree 1183/2020, dated December 29, governs access to and connection with electricity transmission and distribution networks. According to this decree: Developers of generation projects are responsible for financing the specific infrastructure required to connect their installations to the grid, including such as evacuation lines and connection to substations. The development, maintenance, and operation of the overall electricity grid are funded by end consumers through regulated access tariffs (tolls) and system charges, as established in Law 24/2013. The price for the use of distribution networks is determined by the network access toll, which is approved by the Government. In order to be able to request access to the distribution networks, a connection point must first be available under the technical conditions established by regulation.
Grid access policies: The right of third party access to the transmission and distribution networks is one of the guiding principles of the liberalization of the Spanish electricity market. Access to the transport grid is granted by the TSO to all subjects that are considered as suppliers: producers, system operator, market operator, distributors, energy traders, consumers and system load managers. The TSO can only deny access if the grid doesn´t have enough capacity. The price for the use of transmission networks is determined by a toll annually approved by the Government.
Access the report here
