Last April, the Spanish newspaper El Mundo published a story on PV farms that claimed to have produced solar electricity between midnight and 7 a.m. The newspaper suspected the operators of running diesel-burning generators at night to cash in on the high feed-in tariffs for photovoltaic electricity in that country. A number of foreign media channels, including the influential Bloomsberg Businessweek, picked up the story.
The reaction of the Spanish PV industry association, Asociación de la Industria Fotovoltaica, regretted the fact that vague and sometimes unsubstantiated accusations of photovoltaic fraud get into the press with relative frequency. Not all of these stories translate into a valid legal case. Concerned about the public image of the sector, they asked the government to investigate the newspaper’s claims.
Such messages do indeed harm the image of solar energy. Moreover, they fuel questions regarding the usefulness of government incentives. Is the potential for fraud an argument against the system of feed-in tariffs?
Before jumping to any conclusions, it is worthwhile to put the figures into perspective. The total amount of energy that was allegedly produced fraudulently was 4,500 MWh, according to El Mundo. This is 0.05% of the total PV production in Spain in 2009 (Sources: Energyportal.eu and IEA). In the same period, the European retail sector lost 1.33% of their turnover to theft and the American retail sector even more at 1.61% (Source: CRR Centre for Retail Research).
While the story in El Mundo may well be true, some other messages that circulate on the Internet are certainly 'urban legends'. One such legend has been very persistent over the past two years: the story of PV panels being illuminated by fluorescent lamps at night to make them produce more. This is exceedingly unlikely because of simple efficiency reasons. Such an installation would have an efficiency of 10 to 15% at most, while feed-in tariffs are never more than four times the price of grid electricity. Consequently, it is impossible to make profit in this way.
That said, the messages on potential fraud should be taken seriously and investigated in detail. The fact that different tariffs exist for the same electrical energy does indeed leave the door open for fraud. The situation is similar in many countries to that of diesel fuel used for transport and fuel oil used for residential and commercial heating. These are essentially the same product but have different VAT rates, impelling effective and often expensive anti-fraud measures.
How do we avoid multiple tariff systems for the same product and still stimulate sustainable energy? The most rigorous way would be to charge high taxes on all fuels causing greenhouse gas emissions and leave the rest of the sustainable energy development up to the free market. But that begs the question: would this result into a more efficient system for stimulating sustainable energy? Would it exclude all fraud? And when government incentives are efficient in reaching their goal, can a certain percentage of fraud be seen as acceptable 'collateral damage'?Log in to post comments