Photovoltaics inject 76,000 euros per megawatt into towns with tax collection in Spain

The installation of a photovoltaic plant is a money-generating activity for local entities through taxation. UNEF estimates about 76,000 euros per megawatt over the entire useful life of the plant, about 25 years.
The installation of a photovoltaic plant is an income-generating activity for local entities due to different tax figures. Overall, a town council receives a one-time income from the Tax on Constructions, Installations and Works (ICIO) and an annual ‘extra’ through the Tax on Economic Activities (IAE) and the Tax on Real Estate with Special Characteristics (IBICES).

The Spanish Photovoltaic Union (UNEF), which represents more than 800 companies – approximately 90% of the sector’s activity in Spain – estimates that a municipality can receive up to 76,000 euros per megawatt (MW) of photovoltaic installed throughout its life. useful life of the plant, which is around 25 years. The association uses a 1 MW installation as an example so that it can be used as a unit value to calculate the impact of larger plants – typically around 50 MW.

Estimación de ingresos derivados de una planta fotovoltaica de 1 MW

Importe por cada MW de FV instalado
ICIO17.500 €Puntual
IAE1.313 €/añoAnual
IBICES2.543 €/año (primer año) 2.297 €/año (del año 10 en adelante)Anual
Alquiler de terrenos1.313 €/añoAnual
TOTAL en toda la vida útil de la planta (25 años)
Impuestos67.500 €
Alquiler83.767 €
TOTAL151.267 €

In this sense, a 1 MW photovoltaic plant has an approximate investment value of 0.5 euros/MW, that is, 500,000 euros. Applying an average rate of 3.5%, ICIO would have a one-time income of 17,500 euros in the year of construction. In addition, the facility would pay 1,313 euros per year as IAE, while for the IBICES it would pay 2,543 euros in the first year, reducing each year until the tenth, in which it would reach 2,297 euros, remaining until the end of its cycle. For the latter, the cadastral value must be taken into account.

On the other hand, we must take into account the land on which the photovoltaic installation is located, which is generally used on a rental basis with a private individual. The value of this rental can be estimated from 1,000 euros per year to 2,000, depending on the case, the time in which the contract was signed, the area, etc. An average value of 1,500 euros can thus be assumed. Continuing with the example of a 1 MW power plant that occupies two hectares and with said average value, the owner of the land will receive 3,000 euros in income, which can be reinvested in the local economy.

Likewise, UNEF highlights that a solar installation is a source of local employment generation, especially in the construction phase. According to this, approximate employment coefficients of between three and five direct jobs can be considered for each MW in the construction phase (which lasts several months) and 0.05-0.1 jobs per MW in part-time operation (during the useful life of the plant, 25 years). These direct jobs also have a knock-on effect on indirect jobs in other activities of the municipality.

“To increase local employment, it is recommended that the promoter of the facility make a public offer in collaboration with the city council. Likewise, the promoter can offer training prior to the construction of the facility so that there are trained local personnel that can be hired in the moment of the work”, they emphasize in the association.

All of the above can be applied to agrovoltaic installations, that is, solar plants that are built on land intended for livestock and agriculture. In the first case, it is common in Spain to carry out vegetation control by using the land under the slabs as pasture by local ranchers. Thus, they defend that an extensive livestock farming model is promoted at the same time that a more diverse ecosystem is generated on the plant’s land. Regarding agriculture, progress is being made in the photovoltaic sector, universities and research centers in the development of the combination of crops with photovoltaic technology: which crops are compatible, what measures should be used to allow both farms, etc.

It must also be noted that plants are usually built in spaces of low ecological value, in many cases on disused land where there was previously intensive agriculture. “The installation of a photovoltaic plant cannot be considered as an irreparable loss of the soil. It is a space that, in addition to being a refuge for certain animals and allowing the natural revegetation of the soil (thus flora and fauna coexist within a plant), can be compatible with livestock and beekeeping. If it is used for pasture, a space that was previously highly likely to be dry farming becomes suitable for an extensive livestock farming model.
Are photovoltaic panels recyclable?

Photovoltaic panels are “perfectly recyclable”, UNEF highlights. A silicon photovoltaic module (95% of the market) is composed of glass (78%), aluminum (10%), plastics (7%), and metals and semiconductors (5%), and by simply recovering the aluminum frame and the glass on the front is recycled, more than 80% of its weight. The most common methods are based on mechanical processes that are not technically complex. At Veolia’s photovoltaic panel recycling plant in Rousset (France), operational since 2018, the junction box, cables and aluminum frame are first removed. Subsequently, the rest of the laminate is shredded and the resulting pieces are separated by size.

In any case, the recycling of photovoltaic panels is an obligation in Spain since the approval of Royal Decree 110/2015, which transposed Directive 2012/19 on Waste Electrical and Electronic Equipment (WEEE). The WEEE Directive is based on the concept of Extended Producer Responsibility. The ‘producer’ is the natural or legal person who, regardless of the form of sale, manufactures and sells electrical and electronic equipment, puts products manufactured by third parties on the market under their own brands, and who makes community purchases or imports from third parties. countries.

That is, in the photovoltaic sector this ‘producer’ can be both the manufacturer of the panel (or the other components of the plant), as well as its distributor, the EPC or the installation company if the equipment purchase contract states has included the transfer of responsibility. Thus, when the end of its useful life reaches or stops working, the panel (with the rest of the photovoltaic plant equipment) is removed and moved to an electrical and electronic waste processing facility, where its materials are recovered. The panels never end up in landfills but rather in waste recycling facilities.