Editor’s note: This article was first published in July 2013 in the middle of Spain’s retroactive cuts to solar feed-in tariffs; the figure of more than 30,000 small investors comes from a May 2013 El País article. Gamesa has since merged into Siemens Gamesa (2017).
Solar energy, along with wind, will be the future. I have no doubt about it. And Spain got off to a good start with the idea that many people could get into the business of solar farms. The bet was easy to understand and very viable for small private investors to earn a return. All you needed was to install solar panels on a plot of land, produce energy and store it, and the utilities committed to buying that energy.
In less than 10 years you could comfortably pay back the investment, even sooner, and this is what led many individuals to take out bank loans to get involved in the project. Some mortgaged their homes to start what was initially going to be one of the most profitable businesses of the moment, as an article in El País shows.
The state created what was, in our view, an excellent initiative, and the state itself even called for investment in solar energy. Today, more than 30,000 small investors feel as cheated as those who bought preferentes (the preferred shares sold by Spanish banks to retail savers), because it was the government itself that, with its shifting policies and constant reforms, has ended up ruining one of the businesses in which Spain could have been much more competitive than other countries, since if there’s one thing we don’t lack, it’s sun and sea. It has ruined not only the Spain brand in renewables, but also the many investors who will have made the worst investment of their lives.
From 2007 to 2010 everything went smoothly; we ourselves encouraged readers to get into the solar energy business in an earlier article, given the good conditions on offer. Today, many will be forced to declare bankruptcy because their situation has become completely unsustainable unless the government does something to prevent it, and for now it doesn’t seem willing to.
Much of the new job creation in the United States is due to Obama’s pro-renewables policy, as he is promoting this kind of energy with both wind power companies and leading solar companies. Obama knows it’s the future and a way to create jobs in the short term.
In Spain, we’ve sold Europe’s largest solar power plant (Seville) to an Arab sheikh. We have leading renewable energy companies, among them Gamesa, which has practically been driven out of Spain for lack of business.
In fact, renewable energy offers one of the best ways to fill part of the GDP gap left by the construction sector, and seeing that nothing is being done on this front gives some economists plenty to think about, and gives plenty to talk about to those who made a big investment in this business and are now ruined while they watch their electricity bills keep going up.
Featured image: Roquex, CC0 1.0, via Wikimedia Commons.
