Up to 6 Billion Euro Fines For Solar Panels Without Permits

Spain is known for being a sunny country, on average it gets 325 days of sunshine per year and solar power sounds like a good, money-saving idea, however, if you install solar panels without permission, you may face a hefty fine of up to €6 billion.

More and more households are seeking self-sufficiency in times of crisis, where energy prices continue to soar, and renewable energy has become a popular, eco-friendly choice. Over the years, legislation has changed to promote the cost-saving benefits of installing solar panels. However, if you want to install solar panels, you must apply for permits or face substantial financial penalties of between €600,000 to €6 billion.

More specifically, the law also establishes that “in cases in which the offence is related to self-consumption, the maximum penalty will be the greater of the following two amounts: 10% of the annual billing for electricity consumption or 10% of the billing for the energy supplied into the network”.

Why Install Solar Panels in Spain?

Spain’s sunny weather ensures that even in the winter, there is sufficient sunshine to generate electricity and save money on electricity bills. However, the Spanish government has previously taken a stance which did not encourage the installation of solar panels, in 2012, a 7 per cent tax was imposed on conventional and renewable electricity in Spain increasing the cost of electricity bills for properties with solar panels. The toll on solar power energy was introduced by the Popular Party Government of Mariano Rajoy between 2015 – 2018.

Nowadays, government subsidies for the installation of solar panels are a great incentive when deciding to take the step towards renewable energy. European aid for recovery after the Covid-19 crisis also focuses on the green transition to build a better future by promoting the use of green and clean energy.

The Next Generation European Union plan invested over €1 billion for aid to promote green energy. The autonomous communities that received this benefit include Andalusia, Aragon, the Balearic Islands, Castilla y León, Castilla-La Mancha, Catalonia, the Valencian Community, Galicia, Madrid and the Basque Country.

Aside from aid and subsidies, households can receive tax benefits, such as the possibility of deducting part of the cost of solar panel installation from the taxes due, such as a personal income tax deduction of up to 20 per cent.

How much will it cost to install solar panels?

The cheapest method of installing solar panels is an on-grid installation. These cost around €4,000 for a 2.5KW system to €6,500 for a 5KW system.

The off-grid option has starting costs of around €5,000 including VAT. This system would supply sufficient energy to power a small home with around two and three bedrooms. For a larger home, a bigger 7.5KW system with battery would set you back around €7,500 including VAT. The cost to power a larger home with a 10KW system would cost upwards of €10,000 including VAT. These would typically include larger storage batteries of around 900AH. Solar panels are low maintenance, and most brands offer between 2 and 5-year warranties.

How do I Get Permission?

Before installing solar panels, you must carry out several administrative procedures:

1. Prepare a technical report on the installation: for domestic self-consumption installations, an approved installer must visit the property and issue a technical report. For larger installations, a technical engineer will be required.
2. Obtain permissions for access and connection to the network: you need to request permissions through your installer for non-urban land. On urban land, this is usually not necessary, unless the installation exceeds 15 kW and generated power is fed into the grid.
3. Submit a declaration of works: This is similar to a building permit and serves to notify the City Council if the installation does not exceed 10 kW.
4. Obtain administrative and environmental authorizations: for photovoltaic installations of more than 100 kW, administrative authorisation is required. Environmental and public utility authorisation may also be required, depending on the size of the facility.

What About After Installation?

After installation, there are additional procedures to follow:

1. Submit a completion certificate: for small installations that are under 10 kW, an installation certificate must be submitted. For larger installations, a final construction certificate is required.
2. Carry out periodic inspections: for installations greater than 100 kW, an inspection carried out by an authorised body is required.
3. Obtain authorisation: this procedure varies in accordance with the autonomous community where the panels are installed and the size of the installation.
4. Sign a surplus compensation contract: for compensation for the energy generated into the network, you must sign a contract with an energy distribution or trading company.