By Sara Wallace
HUNDREDS of solar power projects could burn out under a new plan to cut government subsidies.
The schemes – many of them set up with foreign money – will go bust, if the Spanish government goes ahead with a planned 30 per cent cut in support for the schemes.
The retroactive cuts would bankrupt hundreds of projects already underway, in addition to threatening plans for future solar initiatives. Many entrepreneurs and private equity groups from the UK and elsewhere in Europe have financed renewable energy projects in Spain, lured by government subsidies that promised guaranteed returns for 25 years.
Spain is currently the world’s biggest provider of solar power, but that could all soon change. Estimates say roughly four billion euros of equity invested in Spain would be lost if the proposed cuts come in.
The threat to impose the retroactive cuts has already caused three companies working with solar energy — Engyco, T-Solar, and Renovalia — to delay projects.
Banks are also worried about being stuck with bad loans, as they have provided financing for about 50,000 solar plants in Spain that would be affected by cuts.
