The (Non) impact of the Spanish "Tax on the Sun" on photovoltaics prosumers uptake

Abstract

There is increasing scientific evidence of anthropic climate change. The need to shift to more sustainable energy systems is therefore compelling. Individuals are becoming key actors in the energy transition, as producers and sellers of the renewable energy they produce on-site. However, the practice of self-consumption requires to be underpinned by adequate policy mechanisms. Under this perspective, the Spanish Royal Decree (RD) 900/2015, also so-called "Tax on the Sun", aiming at regulating energy self-consumption and enhancing the engagement of Spanish citizens in the energy transition as prosumers, by the installation of photovoltaics, represents a challenging case study. There is anecdotal evidence that instead of supporting the diffusion of electricity self-consumption, the "Tax on the Sun" has had the opposite effect. Thus, this work aims at testing this proposition by using the synthetic control methodology (SCM), which permits to evaluate the effect of a treatment in absence of a suitable control group, as in this case. This study finds that indeed at the regional level the "Tax on the Sun" has had a negative impact, if any at all. The current barriers to prosumerism, and more broadly to the active involvement of citizens in the energy transition, are still many and policy-makers should address these shortcomings if they want to fully employ the potential that prosumerism has to offer to a just energy transition.