The government's latest cuts to the solar energy industry will inundate the courts. And at the end of August, the solar industry will post another flood of claims for non-payments of feed in tariffs. Some solar installations have already reached the number of production hours predicted in the Real Decreto 14/2010, which was approved on Christmas Eve and reduces costs within the electric energy industry. Consequently, the companies will be left without a necessary feed in tariffs and will begin to charge market prices for their energy. This amount will be much less than with tariffs.
Specifically, KPMG is in charge of assessing a wide range of companies affected by this regulation, which was added to the budget cuts approved in November of 2010 through the Real Decreto 1565/2010. Tariff reductions equaled nearly 45%. KPMG estimates that this level will be reached at the end of August and in September, when corresponding claims will start to flood in.
Miguel Sueiro, a KPMG partner and the representative of their Renewable Energy Law group, explained to elEconomista that affected investors and business developers will face cuts to solar energy business in two ways. On the one hand, companies will likely make thousands of appeals to the Federal Court, filing against the National Energy Commission?s first round of partial payments for which the companies have already picked up the bill. We should remember that the Federal Court has already admitted to 300 lawsuits filed for the reason, despite the fact that the plants still haven?t reached the limit on production hours. If that were to happen, the number of lawsuits would be tripled.
On the other hand, investors will also petition the Supreme Court for damages caused by "regulatory uncertainty" and because they think that the government has unfairly crippled this business by imposing retroactive decrees on the investors who are financing it.
