Sun sets on Spaniards’ foiled solar power dreams

Sun sets on Spaniards’ foiled solar power dreams
Monday, May 12, 2014
By Katell Abiven, AFP

ALBACETE, Spain–“The sun could be yours,” the Spanish government promised in 2007, encouraging citizens to invest in solar power. Many who did now wish they could give it back.

Tens of thousands of indebted Spaniards have found themselves lumbered with fields full of expensive solar panels whose subsidies have been unexpectedly cut in the financial crisis.

“How do I feel? Completely fooled,” said David Utiel, a 37-year-old teacher who invested in a solar plant, recalling the government’s sunshine slogan.

“Fooled, swindled, disappointed, disgusted.”

He was one of the 62,000 ordinary citizens in Spain who campaign groups say have been caught in a financial sun trap.

Along with 23 of his neighbors from Madrigueras, near the eastern city of Albecete, he jointly owns nearly 360 solar panels that stand in a field of wild grass and red poppies.

“It was the government that gave us the idea,” he said, walking at the foot of the vast black panels.

“It was supposed to be a good idea to put your money in the whole solar energy thing. They said it could be very profitable.”

In return for promises of a regular return, he invested 450,000 euros (US$620,000) in the field in 2007.

“We are completely ordinary people, country people from the village. Some of us work in education, some in farming, others in small businesses,” he said.

“The idea was not to go chasing after subsidies and become millionaires or anything like that. It was to have some kind of pension.”

Long favored by the state, renewable energies are now feeling the pain of Spain’s economic austerity policies.

Spain’s government is taking drastic measures to slash a 26-billion-euro electricity deficit after years of paying subsidies to keep prices down.

Betting the Farm

“It’s the government that encouraged us to invest our savings to generate solar energy,” said Miguel Angel Martinez-Roca, president of ANPIER, an association of small sun power producers.

“It then started to apply retroactive cuts by law once the solar plants were already built. They changed the rules half way through the game.”

UNEF, another solar energy association, estimates that since 2007 earnings by owners of solar panels have fallen by up to half in the worst cases, with losses varying according to the type of installation.

It estimated that the complex series of subsidy cuts would cost owners 920 million euros in 2014.

Meanwhile solar companies owe 22 billion euros to the banks, it says.

“It’s a frankly awful situation. Thousands of Spanish citizens are trapped,” lumbered with solar plants costly to maintain, weak revenues and loans, said Martinez-Roca.

David, who mortgaged his house for the solar investment, has received just 3,000 euros in aid in the past six months, six times less than he pays in maintenance and loan repayments.

Another local man, Manuel Alonso Caballero, 39, left his job in the airport sector to set up his own solar power plant.

He says he invested nearly 1.5 million euros and risks losing it all. His farmer parents have had to mortgage their house as his guarantors.

“I went into the solar business because I really believed what they were saying and I really believed in renewable energy, but I realize now that I was wrong,” he said.

“I’ve lost any trust I had and I wouldn’t invest another euro in Spain.”

ANPIER has lodged complaints in the courts against the state and vows to turn to the European Union authorities if its case in Spain fails.

Martinez-Roca said the group is calling a demonstration in Madrid on June 21 against the government.

“We are not prepared to let them ruin us, insult us and cheat us like this.”



About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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