Spanish photovoltaic self-consumption expands sharply amid a rising energy market
Spain underwent a historic expansion in electricity self-consumption, with the sector’s growth nearly matching the entire previous footprint in a single period. In 2022 the presence of self-consumption doubled in both installations and cumulative capacity, driven by high electricity prices and generous subsidies from European funds that supported grants for new facilities.
Renewable energy companies rolled out facilities nationwide, adding 2,649 megawatts of self-consumption capacity last year. Of this, 1,625 MW were in industrial settings and 1,024 MW in the domestic market, according to the First Annual Photovoltaic Self-Consumption Report from the employers’ association UNEF. The sector’s momentum has raised the total accumulated self-consumption capacity in Spain to 5,211 MW.
The surge translates into real uptake: more than 298,000 homes and 54,000 companies already rely on solar panels for all or part of their electricity, cutting bills during a period of crisis. In the past year alone, the industry added over 240,000 installations, including 217,250 residential and 23,100 industrial-scale installations. Investment in the new facilities reached 3.056 billion euros.
After rapid expansion in 2022, the sector acknowledges a slowdown in the pace this year, with uneven effects across customer types. Large industrial installations remain strong, while residential growth has cooled. UNEF estimates that the domestic deployment rate is 15% to 20% lower than last year.
The self-consumption market recognizes that several years of fast growth were not sustainable, with annual increases near 90% and substantial absolute expansion in the last year. Energy companies hope to continue expanding in the coming years, but seek steady growth that avoids spikes stressing supply chains and requiring unmatched qualified personnel.
Cheaper than a deterrent price
“The market is normalizing. Last year saw an extraordinary peak driven by high electricity prices and European subsidies,” explains José Donoso, managing director of UNEF. These drivers are now fading in impact on local customers, who face tighter budgets as inflation and higher interest rates elevate investment costs.
Electric prices have fallen from last year’s record highs, improving both wholesale and end-user bills. “Prices are lower, not as low as in the past, but consumers have grown accustomed to the new normal,” Donoso notes, acknowledging more frequent reductions in bills as self-consumption expands.
“The drop in energy prices dampens new plant construction, especially in the domestic segment. If a household pays less than a year ago, there is less incentive to pursue self-consumption,” says José María González Moya, managing director of APPA Renovables. “Last year’s record growth now appears more controlled.”
Grants as a bottleneck
The central government allocated 900 million euros in direct support for new self-consumption facilities through the Recovery, Transformation and Resilience Plan, financed by European Next Generation funds. While the central government approves the budget, distribution to final recipients is managed by the autonomous communities.
Industry voices warn of delays in aid payments, administrative bottlenecks in some regions, and budget depletion in several communities. A recent addendum of 500 million euros in new subsidies has been announced to be deployed through the Recovery Plan, compatible with the latest approvals.
“Public aid is being delayed and has already run out in some autonomous communities. There is a long waiting list for applications that the new subsidy batch prepared by the government will address,” notes González Moya of APPA Renovables. He also recognizes congestion as a deterrent for consumers seeking to generate their own electricity, with Donoso adding that some regional authorities have struggled to process subsidies efficiently.