The Promoter of the Solar Park and the individual investor

Somebody has to take the initiative to find the land which is optimal for the purpose of setting up the solar park. The person taking this initiative is often an engineer, who can see the general advantages with a certain land area in comparison to other land areas.

If the solar engineer isn’t the land owner, he, as the Promoter of the solar park, must either buy the land or otherwise make a land lease agreement with the owner.

The basic procedure and the necessary time during which the Promoter must achieve the administrative permits, as well as the sales contract with the electric company, are the following:

1. the Promoter must make a “proyecto básico”, which will take him, let’s say one week, and at the same time, he must present a “proyecto básico”, basic project, with identification of the land where he has chosen to develop the Solar Park, to the Ministry of Energy and Mining, with a requests for a preliminary inscription, “inscripción prevía”, to the special registry of electric energy producers. If the approval follows, the inscription time is normally 1 month;

2. next step is to be inscribed in the special registry for energy producers and request the local electric company to give him a connection point on the grid for the off-loading of the electric energy to be produced from the Solar Park. The time necessary for an answer from electric company is minimum two months;

3. the environmental study is the next and normally most time consuming step in the approval procedure, here estimated to normally take some six months, in order to obtain either approval or disapproval to the application;

4. provided the successful outcome from the Promoter’s efforts regarding steps 1) and 2), the time needed for the final inscription in the special registry of the Ministry Energy Policy and Mining takes yet another month to two months;

5. once the building license for the Solar Park has been achieved through the inscription of the investors under “regimen especial”, the time of construction of 1 MW (equal to ten solar panels of 100 kW each) takes approximately one month;

6. the time needed to sign the contract for the sale of the electricity from the Solar Park to the electric company is according to RD, article 17, obliges the electric company to sign the contract within one month after the presentation of a complete application.

In other words, the minimum time needed for steps 1) to 6) is normally not less than one year.

The preparations on behalf of the individual investor, apart from signing the contract with the Promoter for the participation in the Solar Park, pay a down payment (everything from 3% to 10% of the price) and to transfer to the bank the part of the purchase price that is not going to be financed by the bank, is thereto:

1. if making the investment in his own name as a physical person to apply for a NIE-number – “Número de Identificación de Extranjeros” – which is best handled by a guide or a legal adviser;

2. if the investment shall be made in the name of a Spanish limited company, to set up the company under the guidance of a Spanish lawyer.

Financial possibilities and subsidies
Some notes about fiscal aspects

The investor having fiscal residence in a country belonging to the EU shall according to our investigations have the possibility to achieve a financing through some commercial banks corresponding to a maximum of 80% of the price for the investment.

The period for the loan corresponds to 10 years and the loan is provided in stage payments to the Promoter against certificates from the Responsible Engineer during the construction of the Solar Park. During the time, prior to that the just mentioned loan can be provided, the investor shall normally have to provide the bank with:

1. The Promoter now needs to present his Solar Project to the environmental bodies for the approval, or disapproval. This part of the approval procedure is often considered the most complicated one, partly due to the environmental interests. The normal time for approval seems to be not less than 5 to 6 months.

2. With the environmental approval the construction works can start, after having obtained the Local Authority’s Building License, which can take up to 1 month.

3. The time of construction is estimated to 1 month for each Megawatt to be installed, unless the Project ios builtg and delivered in phases.

The Regional Government of Murcia offers the possibility for non-refundable subsidies.

The latest information obtained shows the following possibilities, which are all subject to approval by the Regional Government:

50 kW fixed panel: 48.829,44 €;        50 kW tracker: 52.245,76 €;

100 kW fixed panel: 32.937,50 €;      100 kW tracker: 34.788,38 €.

The mentioned subsidies are paid out subject to proving the Solar Park is producing electricity and is registered under the “regimen especial”.

As already mentioned here above the period for fiscal depreciation of a solar panel investment is 10 years with 10% per year writing-off of the cost for the investment.

The net profit is subject to Spanish income tax.

In the event of using a Spanish limited company the tax is currently 35% for taxable profits higher than 84.000 € and for less taxable profit 30%.

In the event of an investment as a physical person the tax is …..

All investments are subject to Spanish VAT of 16%.

All income collected is invoiced with VAT of 16%.

I hope that you have by this have found reason to invest
in a better future for both yourself and the generations to come!