Investment opportunity in solar energy in Spain

Solar History

Spain has always been prime real estate for solar energy in Europe, with a yearly solar irradiance of 5 kWh per m2 in the southern part of the country.

But with the financial crisis the government measures not only managed to rein in costs, but effectively put the Spanish renewable energy market into a coma – a coma that lasted from 2013 to 2016 and saw investors flee the country.

2030, Solar Plan

Spain intends to increase its share of renewable energy from 17% in 2016 to 42% by 2030, which means that renewable energy production will have to increase by 74% as proposed in the draft plan. That means an increase in renewable installed capacity of 157 GW – of which wind energy accounts for 50 GW, with solar energy capacity increasing by 37 GW.

PV Panel And Electricity Market

Solar panel efficiency has increased dramatically while prices have steadily dropped. The solar market today is therefore a lot less reliant on government subsidies.

We are moving from a subsidized to a private market. Ten years ago, you needed government backing to stimulate investment, but today the Spanish power market is seeing a booming interest in power purchase agreements (PPAs). Especially popular are the PPAs where an end user or off-taker buys electricity at a fixed price directly from the energy generator over an extended period.

The Royal Decree-law 23/2020 is good news for the Spanish renewable energy sector

The Royal Decree-Law seeks to establish a safe and modern legal framework that guarantees certainty and stability in the energy system. The new system offers the developer a price for long-term energy that guarantees the foresee ability and stability of income for investors and allows participation under equal conditions, whatever their size.

Based on the new remuneration framework included in the RDL 23/2020 and for its draft Royal Decree determines the rules for the auctions and also a new Economic Regime of Renewable Energies (“new Economic Regime”). The new Economic Regime tray to transfer is the reduction of costs from the technological advances in renewable facilities to the consumers. New Economic Regime is composed by the following main characteristics:

  1. In the auctions, bids shall be made for the price of the electrical energy, expressed in €/MWh, and the product to be auctioned shall be awarded by applying a pay-per-bid mechanism. Each successful bid implies that the awarded price will be coincides with its bid price.
  2. The price received by the producers under the new Economic Regime for each negotiation period, per unit of energy sold in the daily and intraday markets, will be calculated from the auction price.
  3. In those negotiation periods in the that the price on these markets is less than the exemption price of collection established in the call of the auction, the price received will be the result of the matching of two markets. Exemption price of collection means the daily and intraday market price above which the energy is accounted for and remunerated at its award price, or by contrast, for market values equal to or less than that price, energy is not counted as auction energy and is remunerated at the market price.
  4. Alternatively, it can be established that the price resulting from the auction will be corrected with incentives for the successful bidder to participate in the market, introducing a certain exposure of the renewable facilities to the electricity market. In this way, the aim is to optimise the integration of renewable energies into the system and maximized savings for the electricity bill.
  5. Additionally, the price received by the renewable producers under the new Economic Regime for its participation in markets other than the daily and intraday market will be directly derived from their participation in those markets (mainly markets for balancing and adjustment services).

Areas with the highest number of sunshine hours in Spain

Published by Fernando Forte, Feb 17, 2020

This sunshine stays mainly in southern, coastal and insular areas of Spain, with Huelva topping the list of sunniest Spanish cities at over 3.5 thousand sunshine hours. Malaga, Almeria, Alicante or Tenerife also made the list, all of them with over three thousand hours of sunshine in 2017.


With so many thousands of hours of sun per year, southern Spain is the ideal place to install solar energy panels. What’s more, thanks to new government program that oblige the electricity company to buy any solar energy you generate, this can be an ideal option for investors in solar energy in Spain.

So everything is ready for a smart investment in solar electricity production in south of Spain as the area has the most solar hours in Europe with an average of 2900 Solar hours during past 5 years.

For getting more information about the investment opportunities in solar energy parks in Andalucia, Spain, please contact us.