February 29th 2016, El Periódico de la Energía: “Self-consumption? Yes for a start.

On February 25th 2016, a vast parliamentary majority (all the political parties except PP and UPN) publically shared their commitment, to eliminate the main obstacles to self-consumption during the first hundred days of Government. In this article I will analyse the procedure agreed on, the content of the legislation, the timing of the changes and the different options for action for those affected by the current legislation.

How?

According to the referred agreement, the new Government, once it has taken office, will adopt a Royal Decree-Law with the articles annexed to the agreement, which will be validated later in Parliament, with the favourable vote of all the signing parties. As a regulatory instrument, Royal Decree-Laws should be used only if strictly necessary since the Government may do so without consulting anyone. However, since the text of this Royal Decree-Law has been agreed upon by the majority of the parties with parliamentary representation, we consider this justified. Such Royal Decree-Law would respond to the situation of extraordinary and urgent necessity of revitalising the renewable energy sector in Spain, devastated after the four years of “anti-renewable energies“ Government of the Partido Popular (according to the Spanish Photovoltaic Union UNEF, only two self-consumption installations have been registered in Spain since October last year).

What?

Following their commitment of July last to repeal the Solar tax in case it would finally be approved, the signing parties have agreed articles for the Royal Decree-Law which imply the removal or reduction of the main obstacles to self-consumption, both the  technical-administrative ones (connection request, self-consumption register, unreasonable penalties, impossibility of shared self-consumption) as the financial ones (fixed and variable charge). The Royal Decree-Law would change some articles from the Electrical Sector Law related to self-consumption and repeal the most harmful dispositions for self-consumption of Royal Decree 900/2015. It would even be possible to regulate net metering. We are talking, therefore, about a framework for the development of a self-consumption regulation in accordance with the rest of our European neighbours, which contrasts with the current framework, qualified by the International Energy Agency as the most restrictive of the world.

When?

The legislative process will consist of two phases. The first will be the approval of the referred Royal Decree-Law, which will take place during the first 100 days of Government, according to what has been established in the political commitment document. Therefore, the question is when Government will be formed, something that is, obviously, unknown at this time. It is clear that there is no self-consumption without Government.

The second phase will be the adoption of a Royal Decree to develop the Royal Decree-Law, to be agreed upon by future Government together with the rest of the political parties and with the social organisations. This Royal Decree would replace the remains of Royal Decree 900/2015 and would develop, among others, the specific regime of net metering or shared self-consumption. In order to achieve this, several months of negotiations and going through the CNMC (the National Markets and Competition Commission) and the State Council are still needed.

And meanwhile, what?

All of this sounds great. But the brave people who already have solar panels on their roofs or that, despite everything, are considering installing panels, will wonder what to do as long as the political situation is being clarified and the legislative changes are taking place.

For existing installations, the regulation arrives somewhat late, since it is unlikely that by April 10th, the moment in which the transitory period of Royal Decree 900/2015 finishes, the new Royal Decree-Law will appear published in the BOE. Therefore, some doubts arise about if it is worthwhile spending money on an electricity meter for the self-consumption installation, requesting (and paying for) the connection point to the distributor or registering the installation in the Self-consumption Register, especially bearing in mind the high number of penalties for breaching the self-consumption regulation. The decision will depend on the risks one is willing to assume. The wisest thing to do is to complete all the possible procedures to comply with RD 900/2015 before  April 10th. If any document would be lacking by then, it would be advisable to register the installation and posteriorly remedy possible defects. All this bearing in mind the political process, because if in the next days Government would be formed and the legislation would finally change, this change would retroactively benefit the existing installations, and would be applied to the penalty procedures that might have been initiated because of noncompliance with the previous legislation.

In the end, the parliamentary agreement published last Thursday is important to put an end to the irregular Spanish legislation in terms of self-consumption. Now it all depends of the fact if Government is formed or not in the next weeks, and that this Government is not Partido Popular. And once there is Government, will it then finally be possible to develop self-consumption? This time it seems, for a start, it may be the case.