This progress positions Spain as the second-largest market in Europe in photovoltaic capacity, reflecting its leadership in the energy transition.

“This growth demonstrates that photovoltaics are not only key to sustainability but also to Spain’s economic competitiveness,” highlights Martín Behar Kölln Director of Studies and Environment at UNEF.

In an interview with Energía Estratégica España, the executive explains that one of the pillars of this success has been Spain’s leadership in renewable energy power purchase agreements (PPAs).

Spain leads this market in Europe, driven by private investment rather than public subsidies.

However, Behar Kölln stresses that, although this model has been effective, structural challenges remain.

“The marginal market does not adequately reflect the prices of renewable energies, which affects predictability for investors and consumers,” he warns, noting that this is impacting the negotiation situation.

According to advisors, securing competitive PPAs for photovoltaic projects has been a challenge in the last year, with prices exceeding €35/MWh.

That has been the limit, and it is expected that with greater penetration of storage and increased demand, these figures will rise, but this will likely only be seen toward the end of the decade.

The report emphasizes the need to reform the wholesale market price system and ensure stability in auction schedules.

This will allow Spain to maintain its attractiveness as a destination for international investments and meet the goals of the National Integrated Energy and Climate Plan (PNIEC).

Self-consumption: Opportunities and challenges

Although 2023 was the second-best year for self-consumption in Spain, installations fell by 32% compared to 2022.

This downward trend has raised concerns in the sector. However, significant opportunities exist in collective and industrial self-consumption, driven by regional regulatory incentives.

Behar Kölln points out that this segment will need to be reactivated with tax incentives to meet the PNIEC goals.

He also states: “Self-consumption remains an essential tool for democratizing energy and reducing costs, especially in industrial sectors.”

Emerging technologies: Agrophotovoltaics and floating PV

Spain is also looking to explore the potential of emerging technologies such as floating photovoltaics and agrophotovoltaics, which are in the early stages of development.

The recent regulation of floating PV opens up new possibilities for its implementation, while calls for funding for agrophotovoltaic projects introduce additional challenges, such as the requirement to incorporate battery storage.

“Although these technologies represent a promising area of growth, overcoming technical and regulatory barriers will be crucial to accelerate their adoption,” highlights the UNEF representative.

These initiatives could diversify the photovoltaic market and add resilience to the energy system.

Social acceptance and local sustainability

The expansion of photovoltaics in Spain is not without social challenges. Local opposition in rural areas has intensified, partly due to misinformation spread by platforms opposed to renewable energy projects.

Behar Kölln emphasizes the importance of involving local communities from the outset.

“Improving communication and promoting economic and social benefits in the affected regions are crucial steps to reducing resistance,” he assures.

Integrating measures for biodiversity excellence and strengthening local participation will not only mitigate opposition but also create a positive impact on communities, reinforcing their commitment to the energy transition.

Regulatory and technical challenges for the future

The report also identifies critical barriers to sector development, such as permit management and the integration of renewables into the electricity grid.

Although recent regulations, such as RD 1183/2020, have simplified certain processes, significant obstacles remain in grid connections and financing merchant projects.

“The electrification of plants requires effective coordination between the TSO and the Ministry of Industry to avoid bottlenecks that delay the deployment of renewable capacity,” describes Behar Kölln.

In addition, it will be essential to invest in storage infrastructure and technologies like green hydrogen to ensure the flexibility and stability of the electrical system.