Solar disobedience

Why a Spanish solar supplier advertises civil disobedience.

That’s not a coinage but a quote. From the website of Spanish solar equipment vendor Efimarket:
efimarket screenshot(Key graf: “Enjoy self-consumption and solar disobedience, supporting the democratization of solar energy and environmental sustainability”.)

What is going on? How on Earth did Spain get to the position where businessmen are using civil disobedience as a selling-point for solar DIY kits?

A little history.
In 2002, Rodrigo Rato, economics minister in Aznar’s PP government, decided that electricity prices should not rise by more than 2% a year.  The result was a growing gap between the cost and the price of electricity, met by the state budget. Rato’s stellar career ended when he presided over the bankruptcy of the Bankia bank in 2012, leading to a Spanish record bailout of €19bn. In between this exemplar of financial rectitude had a gig as Managing Director of the IMF, preceding orgiast and accused rapist Dominique Strauss-Kahn. Are you surprised the BRICS want a more transparent process for filling this post?

Under Zapatero’s  two socialist governments (2004-2011), Spain offered generous incentives to medium and large-sized solar generators. For a few years, Spain was second only to Germany in solar installations. However, Spain’s subsidies were unfunded and fell on the state budget – in Germany they are paid by a levy on all electricity ratepayers. So the electricity deficit widened.

Spanish generating companies invested in large amounts of conventional capacity, as well as wind, under market reforms that are pretty opaque even to insiders, so it’s possible profits are being hidden. Meanwhile, recession has reduced demand. There is about 6 gw of overcapacity.

Came the financial crisis of 2007 and, worse, the austerity policies imposed by Berlin and Brussels on Spain and other bailed-out countries. The Rajoy PP government went into full reverse on solar: from generous FITs to retroactive cuts. To make sure a solar rooftop sector did not emerge, and make the deficit of the generating companies worse, it launched a reform (Electricity Sector Act 25/2013)  which offers the following to the owners of distributed rooftop solar installations:
(a) removal of any guarantee for payment of fed-in electricity, it’s to be fixed by the government (Article 9.5). The previous draft secondary legislation, presumably reflecting the same government’s policy, had it “freely negotiated” with implacably hostile utilities (draft decree on self-consumption, Article 14.3),
(b) imposition of a “backup tax” on self-consumed electricity, to pay for all those generators you have shamefully deprived of your custom (Article 9.3),
(c) to enforce (b), a requirement on all owners of solar installations for self-consumption to register them,on pain of fines between €6 million and €60 million (not a typo). (Article 64.43 and 67.1.a)

The press speak of 6c€ per kwh for the backup tax, similar to the German EEG charge – which is not for backup, but for reimbursing the grid for above-market FITs and subsidies to industry. But no official proposal has been tabled with a rate, nor has the registry been set up. It’s essentially a threat to deter anybody from trying.

The fine can be contrasted with those for the most serious breaches of nuclear safety and security. The Nuclear Energy Act 25/1964, Article 89, lays down a maximum fine for grave violations of €30m.  Allowing drunken games of chicken in a reactor control room, or the diversion of nuclear fuel rods to allow illicit extraction of plutonium, are less serious than operating solar panels without telling your utility.

As Forbes satirises, this is panic in lieu of policymaking. What is behind it?

Fossil-fuel generators have seen the solar future in Germany, and it spells bankruptcy. The problem arises from the most criticised weakness of solar power, its variability. It’s strongest at noon – precisely when fossil plants used to make their money. Even at Germany’s quite low solar penetration (7% of all generation in the first half of 2014), it’s been enough to knock the noon wholesale price on the head. European generating utilities have seen €600bn (again, not  a typo) wiped off their valuations since their pre-crisis peak : not only from the renewable strike, but partly. Since their coal plants are now effectively worthless, German utilities have naturally run to Mother and submitted a list of 28 plants they want to close. It’s the financial crisis in coal that has driven the slowdown of the Energiewende, not the noisily alleged unaffordability of the renewable FITs. These are an almost entirely sunk cost; the subsidy going forward is negligible, since FITs for new wind and solar are so low. That won’t make the problem go away. Coal will become a ward of the German state, which can well afford it. A similar process is behind the even sharper reversal of policy in Australia, though Oz politics are much funnier. And IMHO it explains Spain’s OTT war on solar. This is doomed to fail; the learning curve for solar is inexorable.

Spain has the best sun in Europe, and solar would be competitive today without any subsidy. It even pays, just, as a samizdat setup with a zero FIT. I estimated the payoff time for one of Efimarket’s 1 kw kits at 10 years, with a suboptimal SE orientation and 80% self-consumption. Naturally that includes risking the €6m+ fine by not declaring the thing, which would land me with €1,600 in permitting costs. With neutral policy and streamlined permitting, prices would drop sharply to German levels (€1.6/watt) as the scale increased.

Technology has BTW made the illegal option much easier and safer. The kit uses microinverters not string ones, which means the wiring on Thoreau’s roof is conventional 220v AC, no more dangerous than installing an outdoor plug for a lawnmower.

I’m tempted. But does the move meet the tests for civil disobedience? I’m not sure what these are: less than those for armed rebellion, more than those for simple protest. Thoreau, Gandhi and MLK are not much help here. The evils they were combating nonviolently were rather larger than Spain’s muddled solar policy. But it is absurd: discriminatory (the backup tax is not levied on other consumers or generators), anti-European, anti-mitigation. There is a strong suspicion it is also corrupt, and not reversible by ordinary electoral politics. Spanish generating companies are not truly competitors, rather a cosy oligopoly protected by politicians. No fewer than 43 ex-politicians have secured cushy retirement “jobs” as consultants in the sector. Not just small fry: Aznar is a consultant to Endesa, Gonzalez to Fenosa.

Civil disobedience is only a political act if you advertise it. My hypothetical installation would be invisible from the road, and if the kit works as advertised, to Endesa. Foreigners don’t have much leverage and fewer civic rights and duties. So I will would probably be a cowardly stealth protestor. But it would be a great move for Artur Mas, separatist leader of Catalonia, who has just suffered a defeat with only 40% turnout in his pseudo-referendum on sovereignty. 80% of those who “voted” were in favour, so honour was saved, but it fell a long way short of a moral victory. In his shoes I would get German technicians to put up as many solar panels as his roof will hold, preferably in stylish anarchist black, and defy Madrid to come and levy the fine.

Author: James Wimberley

James Wimberley (b. 1946, an Englishman raised in the Channel Islands. three adult children) is a former career international bureaucrat with the Council of Europe in Strasbourg. His main achievements there were the Lisbon Convention on recognition of qualifications and the Kosovo law on school education. He retired in 2006 to a little white house in Andalucia, His first wife Patricia Morris died in 2009 after a long illness. He remarried in 2011. to the former Brazilian TV actress Lu Mendonça. The cat overlords are now three. I suppose I've been invited to join real scholars on the list because my skills, acquired in a decade of technical assistance work in eastern Europe, include being able to ask faux-naïf questions like the exotic Persians and Chinese of eighteenth-century philosophical fiction. So I'm quite comfortable in the role of country-cousin blogger with a European perspective. The other specialised skill I learnt was making toasts with a moral in the course of drunken Caucasian banquets. I'm open to expenses-paid offers to retell Noah the great Armenian and Columbus, the orange, and university reform in Georgia. James Wimberley's occasional publications on the web

9 thoughts on “Solar disobedience”

  1. James,
    I don't understand — why don't the German coal companies slash production and raise price per unit at all hours of the day that solar isn't available?


    1. Germans are allergic to cartels, associated with the rise of the Nazis. The Cartel Office runs the toughest antitrust regimen in Europe, possibly the world since US enforcement was watered down. The generators are stuck. Despatch on the grid is, as everywhere, by merit order, so wind and solar, with zero marginal costs, always go first. Germany has recently been exporting large amounts of power, but not very profitably, and often at a loss when the plants are old and inflexible. But even if they are modern and flexible, running them half the time doesn't cover the bills. Baseload is history.

      1. Thanks that is interesting, Is there anywhere solar actually competes without heavy governmental support by regulation or subsidy?

  2. "Thoreau, Gandhi and MLK are not much help here. The evils they were combating nonviolently were rather larger than Spain’s muddled solar policy. "

    1. I appreciate the implied endorsement, but what's your point? If you are suggesting that my support of solar disobedience in Spain is self-contradictory, may I observe that these examples of acceptable civil disobedience do not establish a minimum benchmark.

      1. Sorry, the software cut off my response to the quoted passage, which went something like this:

        I don't accept this as obvious, or even true. Granted, penalties on installing solar panels are not on their own a huge deal, but neither is which seat you use in a bus. Solar policy can't be viewed on its own, but in the context of global warming. The rules cited are among many which deliberately impede a proper response to climate change for the short-term benefit of incumbent interests with fossil fuel business models. Given the dangers to everyone of climate change, this is just as large an evil as Jim Crow or imperialism.

        1. I think you are right. Civil disobedience must be in a big cause, not to fight a minor nuisance. As with violent rebellion, there have to be no realistic alternatives and conventional politics must be failing. (The bar here is surely much higher for violence). The "reasonable chance of success" condition for just war probably holds too, though again not so strongly. And the action must probably make things marginally better in isolation – a test which violent methods usually fail. Any better ideas for the general conditions?

  3. 1. Chile. Not a typical case at all. The plants are going up in the Atacama desert, one of the driest places on earth, to serve large mines. The region is not even connected to the main grid in the south.

    2, Texas. The municipal utility in Austin famously signed a solar PPA for 5c/kwh. Texas has no renewable incentives, but a genuinely competitive market, supervised by the neutral grid operator ERCOT. This price is par for the course in the US Southwest according to Mark Bolinger's team at LBL. That translates to around 8c/kwh before the tax credit, due to expire in 2016 – big lobbying fight coming up. It is very contentious whether you should count tax breaks, since fossil energies and nuclear have enjoyed them too, for much longer and on a larger scale, though per watt they are now higher for wind and solar.

    3, Australia. The FITs have dropped to 8c/kwh, which is not far off wholesale, and you should add some value for avoided distribution costs, so to a first approximation there is no subsidy. Since retail rates are very high, Australian homeowners are continuing to put in rooftop solar in spite of the active hostility of the Abbott government.

    4. Africa. Offgrid there isn't much alternative.

    That is a very short and incomplete list. German solar benefits from strong regulatory support (such as no permitting for residential rooftop solar) and a feed-in right, even if the financial incentives have become negligible. Brazil has started to buy utility solar at 8.6c$/kwh, still a bit above wind and hydro. Mexico offers IIRC regulatory support rather than incentives. Turkey offers an FIT.

    It's not just the tax breaks that make comparison hazardous. A true level playing field would of course count externalities, The US government already uses an implicit carbon price in its evaluations. Valuing climate damage is difficult, but the health costs of coal and diesel are large, certain, measurable, and already included in national income statistics, so there's no excuse for leaving them out. I don't understand why the IPCC mitigation team put up an estimate of the net costs of the energy transition as more or less zero (0.06% off annual growth), and then added health co-benefits separately, making the net cost easily negative.

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