Spain is a powerhouse for solar energy production in Europe because it has excellent sun resources and because it has a feed-in tariff for renewable energy production, as does Germany. With a feed-in tariff, project developers are ensured that electricity will be purchased at a certain rate over a fixed term (currently €0.34 per kWh), usually for 20 or 25 years, this creates an excellent annual financial return of up to 12%. Try getting that kind of return from your bank.

One such deal has just been announced by Recurrent Energy. They plan to install 4.8 megawatts worth of solar panels on several rooftops leased from distribution company ProLogis. In this model, Recurrent owns and operates the panels and sells the electricity the panels generate. ProLogis gets a one-time construction management fee and an annual rental payment.

ProLogis will also provide construction management services and is expected to begin development in October 2009. The execution of the projects will use local services within Barcelona and Madrid, including local contractors, engineering firms, and consultants. The completion of all projects is estimated for mid-2010.

I am very interested in this kind of distributed energy network in Spain as one of the companies following this model is my own company, Pretasol Energia. This model, where an outside company rents rooftop space and sells the panels’ electricity, is also being pursued in the U.S. by a small number of utilities. Southern California Edison, is planning to install as much as 250 megawatts worth of solar energy capacity on hundreds of commercial rooftops.

Over the past few years the focus has been on large, autonomous solar photovoltaic power plants. But financing those large plants and finding sites for them, often in environmentally sensitive protected land in the southwest U.S., has slowed deployment of those large-scale systems.

The combined output of Recurrent’s installations in Spain, which are set to go online in 2010, is enough to power well over 1,000 homes. By contrast, a centralized solar plant would be built with enough capacity to power hundreds of thousands of homes. However, the benefits are that the land is already developed (the rooftop is already there) and power lines are in place reducing infrastructure costs and environmental impact.

“Working with Recurrent Energy brings us their expertise of developing distributed-scale projects which are faster to interconnect and permit, delivering the benefits of solar energy sooner, “ said Drew Torbin, director of global renewable energy for ProLogis. “We are a solid match, with more than 450 million square feet of large, flat, unobstructed, permit-ready roof space worldwide, ProLogis is able to solve one of the most basic issues involved in developing large-scale solar projects –the availability of appropriate host sites.”

Recurrent Energy CEO Arno Harris said in a statement.
“We have over 500 MW of distributed-scale projects in development across North America and Europe, and what this project successfully demonstrates is the sizable role commercial and industrial rooftops can play in large-scale solar deployment,”.

Photo is an illustration of a solar installation planned in Spain (Credit: ProLogis)