Tax incentives for photovoltaic power self-consumption: an analysis of the Spanish experience

Abstract

Spain has been one of the pioneering countries in developing the photovoltaic power generation. Since its initial launch, there has been substantial involvement of public incentives in three different ways: tax incentives, direct subsidies and regulated prices for the power generated by photovoltaic investments. Due to the involvement of public promotion in developing photovoltaic power production, there has been a debate on the best way to make the increase of the photovoltaic production power compatible with the desirable neutrality of public activity (aside from the necessary promotion of the environmental needs). In this regard, the treatment of self-consumption is a key issue for the faster increase in photovoltaic facilities. The final electricity market shape depends on how selfconsumption is treated from a fiscal point of view, as well as for regulated matters including the possibility of selling electricity to third parties through networks at a given price. Some are of the opinion that tax incentives for self-consumption must be avoided while others believe that faster development and production of photovoltaic technologies require strong support from public institutions.