The popularity of solar power has been growing around the world with countries such as Germany and Japan investing heavily in this area with preferential tariffs and government incentives designed to encourage participation in this sector.
Spain has traditionally been heavily dependent upon imported fossil fuels with 87% of energy generation from this source in 2004, and renewable energy generation accounting for only 5.9%.

The government has pledged to increase this to 20% by 2010 which was estimated to require an investment in the region of €24bn. In order to generate private sector participation and ensure the targets were met, government legislation was introduced.

The catalyst behind the opportunity is Royal Decree 436/2004 dated 12th March 2004 (Published in the Oficial Boletín of the State Nº 75 of the 27th March 2004), as issued by the Ministerio de Economia. In brief, RD 436 revised the tariffs payable to Spanish companies involved in producing renewable energy particularly photovoltaic power(PV). The new regulation provided, for the first time, long-term state guaranteed and bankable earning over the primary life cycle (25 years), and a secondary period of the grid connected PV system. The decree enables supplies to attract a rate of 575% of the TMR (Tarifa Media de Referencia) for electricity generated by installations up to a rating of 100kW. The decree is currently under revision with important changes that will further mitigate risk and facilitate sustainable growth of the sector.

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