The Sun Tax and the End of the Electricity Monopoly

The tax on the sun and the end of the electricity monopoly. They are two concepts that, in the end, are the same thing. I'll try to explain myself.

First, some concepts need to be clarified. There is some confusion with terms such as Self-Consumption and there is a fear (with good reason) of the call, according to the legislation “backup toll” and according to the street “imposed on the Sun”.

What is Self-Consumption? When an electricity consumer produces all or part of the energy he needs, he is said to be Self-generating and logically Self-consuming.

The current Self-Consumption regulations, regulated by Royal Decree 900 of 2015, impose consumer payments to their electricity company if they use self-generated energy. It is clear that if a consumption (our house or an industry) is powered only with solar energy, we will not have to pay any backup tolls. But if we consume part of the energy from our solar panels and another part of the electricity grid, we will have to pay that “backup toll”.

What is the logic of the “backup toll”? Only the electric companies, Minister Soria and his people, can find it. The Ministry of Industry's justification is: “since you're going to need energy from the grid other than solar panels, you have to pay for that backup.” In this argument, they forget that you already pay a price for the rest of the energy you consume, it's not free. And they forget that we also pay a fixed amount every month, whether consumed or not.

This “logic”, in another area, would be as if you were growing vegetables in your garden, but since they will ever be short and you will have to go to the supermarket, the supermarket would charge a “backup toll” for each tomato produced in your garden, logical... or not?

But you can't “put doors to the field” forever. The current legislation that favors large Electric Companies to the detriment of the benefit (and the rights, I would say) of citizens and companies, will undoubtedly change in the future, let's hope not too distant. There are many countries in the world that are legislating with laws that favor consumers, connected to the grid, to produce their own energy (what is called Distributed Generation)

But how much would our solar energy cost us? To get an idea of the cost of electricity that we can produce with solar panels on our roof, let's do a simple calculation. A small domestic photovoltaic installation can cost about €2,000 for each KW of power. This KW of plates will produce about 1,500 kWh per year, in an average radiation zone in Spain. If we give solar panels a 25-year life, a linear amortization would give us an annual cost of 80€ to produce those 1,500 kWh. Therefore, the cost of that kWh will be 5.3 c€. If we consider that the cost of that kWh currently, including taxes, can be in a home, of about 16 c€, the difference is obvious. And for larger installations, the cost per kWh is below 3 c€.

In this case of self-generation, electric companies stop obtaining “their” benefit for each kWh that one of their customers self-consumes, since they have not sold it. Here we have the lost logic of the “backup toll”. We couldn't find it, but I had it.

Will we ever have freedom of self-generation in Spain? Surely so, and that day will be the beginning of the end of the current electricity monopoly. This is why electricity companies are so afraid of solar energy and Self-consumption and as long as they can, they will influence Governments with their powerful Lobby, to impose “taxes on the sun”.

Featured image: The Voice of Galicia