EPIA: les prix de la technologie solaire vont "de mieux en mieux"[en] 

Ernesto Macias Galán is vice president of the European Photovoltaic Industry Association (EPIA).

Please click here for a news item related to this interview.

What is your feedback on what is being proposed by the Commission in terms of the renewables directive, particularly with regard to trading? 

It is a complex situation. We have many things to solve regarding the directive from the Commission. The implementation is different in every country. We support the feed-in tariff entirely. On the other hand we have a large number of enemies, as the PV is still not cheap enough, but is getting better and better. Nonetheless the required financial contribution from countries is still relevant.

By the end of September, we will have installed at least one gigawatt in Spain. The government did not expect this in advance, and for the financial minister, this is not good news. So the debt from the government to the utilities is getting bigger.

In Spain, some of the utilities are taking advantage of the situation and they are becoming producers. But in general terms they are not supporting this because many of them do not think PV is a source of energy for the future. In terms of cost, they don't believe that what we are announcing for the coming years is going to be true. 

We are having an experiment with wind energy, and in fact a few weeks ago in Spain we produced more energy from wind than we did from nuclear in one day. It was a significant day for renewables in Spain. Wind is a very fast growing success story, but it still has its enemies. 

So for solar energy, we have been trying to convince the governments in Germany, Italy, France and Spain to have legal frameworks with feed-in tariffs. But most of the stakeholders surrounding solar energy in these countries don't believe this is going to be more than a small story. They will provide support for R&D, but it is not perceived as mature enough to be considered as a relevant source of energy in the coming years.

[Please also click here for further responses submitted by EPIA to EurActiv concerning the Commission's proposed directive and the PV market.] 

But at the same time you said the expectations of the Spanish government were exceeded, where more PV was installed. So now they are facing a situation where they have to pay more feed-in tariffs than they expected, is that true?

Yes. The problem is that the model they have created in Spain is quite different to the one that has been created in Germany. 

In Spain we have big investors and big plans. Some of the values of PV are not so relevant, like the capacity of small plants, fed in to the low-tension system. Thus, combined with the high tariffs we have, Spain has generated an artificial market with these large plants that can generate up to 70 MW, which has produced a lot of enemies. 

An argument we have used in our favour is that this industry will create a lot of employment in the long term, and we still need subsidies to realise this. What is happening in Germany is that most of the modules that are being installed are coming from China and Japan and so on. So it is a kind of contradiction. So our enemies are using this and saying we are investing our taxes in order to give our money to the Chinese. Even in terms of investment, some investments are not coming from Spanish investors, but from Chinese or Japanese etc. So, unfortunately the situation is quite complex. 

The good news is that we have made a lot of work in the past 5-6 years. In Germany we can see how we can link market growth to industry and technology growth. For me the greatest difference is between countries in Europe. Especially in Germany, where the effort is seen as too great for an uncertain future. 

So in Spain there is much less micro-generation and fewer households with solar panels than in Germany?

Absolutely. In Spain over 80% of solar use is large-scale. The legal framework has already changed in the EU, but we have until the end of September where the previous legislation is applied. So from October onwards there will be new legislation. So the big barriers in Spain are the new administrative processes, because for a normal citizen it is a nightmare to get a licence. The administrative procedures are absolute nonsense. 

We could allow 4-5 MW in some areas. But due to the state of art of our technology, it makes more sense to have small plans and low-tension production. It would also increase visibility. If you drive on the road and see a huge solar plant, it is not perceived as a real alternative. The enemies have it easier, as they claim it is an incredible cost in relation to what we receive.

How is this reflected at political level?  

In many countries there is an interesting contradiction between speeches and political positions. You will hear the president of the government talking about the fight against climate change and support for renewables. But when we need to transform these positions into actions there is a big gap. Suddenly the finance and industry ministries do not want to commit too much as they are thinking in the short term. There is mostly a short-term plan for the energy cycle. So it is not really perceived as a real alternative.

Is this because the return on investment is not perceived as sound enough?

Well, not for the government. We have a contradiction in Spain. It has been a success story for investors as you can have up to 10% interest in the current conditions, but for the government it is a big bill every year. They don't perceive these investments into the solar industry as turning into a real source of energy, as with wind, in the coming years. 

If you look at the past 10 years, no-one could have perceived that we would be producing more energy with wind than we are with hydro or coal. Wind is now only behind nuclear and gas. This is really important – wind is about 10% of our electricity in Spain. This is a lot.

Are you confident that prices for solar panels will come down?

Absolutely.

But what about the current shortage of silicon. Where is this extra silicon going to come from?

It is well known that a few companies have started to react a few years ago. Companies will continue to produce the raw materials needed, as many are doing in China, Japan and the US. On the other hand the use of polysilicon is going down. We are increasing efficiency in the cells. 

This mini-crisis that hit the industry a few years ago will probably remain for one more year, but after more raw material becomes available on the market it will be resolved. 

Previously, people in the R&D industry were not involved in the solar industry, but now we have some brilliant people involved in this. We are getting fast results from this. We can predict that in Southern Europe, the cost of the production of a PV plant with be lower than the tariff by 2015. So in economical terms, it will not be a long time until we are very efficient. PV works, the only barrier is the cost. If we can bring the cost down, we will do away with the barriers. When we don't need the subsidy we will see the market respond.

So a lot of the problems are related to regulation and politics - what about the new directive from the Commission, will it provide a good framework?

We still need to find concrete targets for countries and penalties if they do not achieve the targets.

In general terms we have a problem, it is very clear. The energy problem globally is huge. When we talk about the European problem we sometimes ignore the fact that it is a global problem. In Spain the people are quite confident about gas, gas is the number one provider in Spain. But our gas is coming from North Africa, this is not a stable area. 

Recent reports indicate that oil could reach $200 a barrel by the end of the year. So the scenario is clear: we need to be in favour of renewable sources. And PV works. So let us look at the technologies that work. Biomass, like biofuels, has parallel problems, it is more complicated. I don't know why some people are so reluctant about PV. It can be a relevant source for many countries in Europe. If we say that by 2020 we have to produce 20% renewables, it is too general a phrase. Because in Spain they could move towards wind as it is much cheaper. 

So the Commission should decide on the sources and specify targets for every country. If not, countries will obviously choose the cheaper alternative.

Could trading be one of the cheaper solutions?

Absolutely.

You do not see trading favourably?

Absolutely not. 

I think there is a lack of information in general for the population about how PV can contribute to the energy crisis. There is no big interest in energy efficiency. When the tariffs come down, people will see the benefits of PV.