The European Commission gives free rein to a reduced VAT for self-consumption

The European Commission has opened the door to the application of a reduced VAT of 5% for self-consumption for residential use with the intention of increasing its use to achieve the objectives of the European Green Deal.

Self-consumption has had a reduced rate of 10% since last April in Spain as long as it is part of a rehabilitation and that it represents less than 40% of the cost of the work, but the sector has long claimed a reduction to 5% in order to speed up its implementation.

According to a study by the Institute for Energy Diversification and Saving (IDAE), self-consumption can reach between 9,000 MW and 14,000 MW of installed power in 2030.

Since 2018, when the so-called sun tax was ended, self-consumption has multiplied by 2.5 to reach almost 600 MW installed during 2020 and for this 2021 an increase of approximately 1,000 MW is expected, with which the total accumulated could reach 2,500 MW. In addition, the CNMC expects the number of clients to quadruple during 2022.

The proposed reform of the directive, which was analyzed on December 7 by the European Council, will provide the Spanish Executive with a further reduction and also opens the possibility that European governments can extend it to the heating and air conditioning systems considered sustainability, Internet access, bicycles (including electric ones), baby seats and legal advice on labor matters.

You want to include bicycles, internet access and sustainable heating in the minimum rates

Likewise, the European Council wants to eliminate exemptions for fossil fuels or other materials with similar effects on emissions such as wood before January 1, 2030 or chemical pesticides or fertilizers before January 1, 2032.

Íñigo de Amorebieta, CEO of Otovo, a company specializing in the installation of self-consumption, explains that the current authorization system “overloads an already saturated public administration, in addition to fueling inflation, in a sector where strong increases in income are already being observed. price, fed by a current aid scheme that makes the client less sensitive to these increases. Additionally, the administrative complexity has favored the appearance of agents to process these aid. These intermediaries are keeping large amounts of this money (300-500 euros per facility) for processing paperwork. “

To avoid this situation, the Government has approved this week that all projects under 100 kW are exempted from presenting financial guarantees to be processed. In addition, distributors must have open communication channels – such as a free telephone number or an electronic address – to answer questions and obtain information regarding access files to the network of self-consumption facilities. As with electric recharging, the RDL updates the sanctioning regime to avoid delays in the processing and registration processes of the facilities.

As Solar Profit explains in its IPO brochure, Spain already has a highly developed market for self-consumption at the moment. First of all, there are companies in whose area of ​​activity are companies specialized in the installation of photovoltaic panels such as Solar Profit or Contigo Energía. These can act both in the residential and industrial segments (for example, Solarwatt), or they can specialize in one of them (such as Greening or EiDF, which exclusively satisfy the demand of an industrial nature).

In second place, there are the electricity companies that have begun to include photovoltaic study or installation services. These companies mostly outsource the service. This group includes companies such as HolaLuz, Naturgy, Iberdrola or EDP.

Third, there are vendors in large areas (furniture, DIY products, construction, etc.), which include solar panels. Sellers are not specialized in the installation of plates, so there are generally agreements with third parties to carry out the installation or they can sell DIY (Do It Yourself) photovoltaic panels with accessories for self-installation. Finally, consumers can find panel installation services through different marketplaces, where they can compare quotes.

EiDF has orders for 110 MW

EiDF, a specialist in photovoltaic solar energy installations, closes this year with ongoing orders in the area of ​​self-consumption for a value of 110 MW, equivalent to an approximate amount of 65 million euros, to be executed in 2022. This represents a substantial improvement with respect to the revenue forecasts for the year 2022 included in the business plan approved for the next four years. The company registered its weekly sales record this year, managing to sign works for a volume of 17.5 MW, equivalent to 13 million euros, in the third week of October.