THE Spanish government has announced it may cap subsidies for solar panel power.

The new measure comes as part of a plan to curb electricity costs for consumers.

Rather than cutting the subsidies directly, the intention is to limit the number of hours of output during which subsidies can be earned.

Photovoltaic (PV) solar plants, which usually generate electricity for 1,600-2,000 hours per year, would only receive subsidies for 1,200-1,644 of those hours.

But it is as yet unknown how much of an impact this will have on the companies.

Already this year the country’s renewable energy firms have seen share prices fall amid reports the government may cut lucrative subsidies not just for future plants but for existing ones which have set tariffs for 25 years.

Antonio Hernandez, general director of energy policy at the Industry Ministry said: “We want to prevent electricity becoming more expensive as the sun shines more.

“One of the possibilities is that the number of hours that subsidies can be earned would have limits.”

But plant operators and trade groups are strongly opposed to the idea and have threatened to sue the government for as much as one billion euros, should the limits be imposed.

Hernandez, who insists the ministry will reach a decision in the coming weeks, must now find a way to limit power prices for the industry and households as the Spanish economy struggles to emerge from the recession.

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