Unveiling Portugal´s Solar Potential

According to Solaris, a reputable source of data on solar hotspots, Portugal proudly holds a place in the top 100 PVOUT list, signifying its substantial potential for generating electricity through photovoltaic (PV) systems. With its abundant sunshine, Portugal stands tall among Europe’s giants when it comes to harnessing solar energy. Yet, there appears to be a curious delay in the widespread adoption of residential solar systems in this sun-kissed nation. In this blog, we embark on a journey to unravel the mysteries behind this delay, seeking to understand the underlying factors and contemplate what this might signify for Portugal’s solar future.

Tucked in the southwestern corner of Europe, Portugal boasts more than just picturesque landscapes and vibrant culture. It is a land blessed with an abundance of sunlight, averaging around 300 sunny days throughout the year which firmly places it among Europe´s solar power3houses. This radiant potential begs the question: Why has Portugal not yet fully embraced solar energy for residential use?

Web of regulations untangled

One of the main obstacles to widespread solar adoption in Portugal is the complex regulatory framework within the built environment as well as little to no incentive for net-metering. Having to navigate the bureaucratic maze to have modifications done to your property has been relatively challenging over the years, often leaving individuals and businesses alike with little to no incentive to invest in renewables such as solar. 

Thankfully, the nation has taken steps in the right direction by streamlining the process with clear guidelines and regulatory frameworks to follow. Here at Solar2Power, we handle the entire process for you, getting your system registered and approved by our DGEG-licensed engineers upon completion.  It is also worth noting initiatives from the environmental fund in 2023, with an ongoing campaign ending 31st of October, offering loans to homeowners of up to €3300 for a solar system with batteries and €1100 without batteries. These loans, while small, still may create some incentive for those looking to finance a portion of their investment. It is however very important to read the fine print when requesting financing. Not only are there financing options, but the IVA currently is at 6% on solar installations! That is subject to change so it is always best to take advantage of the tax rate cuts when given!

Looking to the future, It seems that we are approaching a dawn of change, where the desire for decentralised off-grid living is becoming more affordable and desirable. The small initiatives by the government may go a long way, allowing for the adoption of solar to expand exponentially and firmly position Portugal as a global leader in renewable energy in the years to come. Like with most things, there is always room for improvement, in this case, from our energy leaders who need to step up with their initiatives that empower residents to maximise their energy usability and of course return on investment. Last but very importantly, it is vital that you use only premium quality photovoltaic(PV) panels, inverters, and batteries for you to benefit from improved efficiency, software, warranty, and power generation! Here at Solar2Power, we are your leaders in providing you with the best quality solutions in the Algarve. 

Financial Hurdles

The long-term financial benefits of solar power are well documented, however, the required initial investment has deterred many from taking the leap. Over the past decade, the efficiency of solar technology has improved drastically, allowing for more energy production with fewer panels. This has, in turn, created more affordable options for the consumer and faster return on investment. Customers who have opted for solar solutions for their residential homes here in Portugal are usually pleasantly surprised by how much more affordable the options have become compared to a decade ago.

Here are some catalysts that would push people toward Solar:

• History suggests that if there is more conflict from the Russia-Ukraine war, energy prices rise creating more demand for off-grid solutions. This however leaves solar companies and manufacturers flooded with inquiries, creating waiting periods of up to 1 year for inverters or battery modules as supply cannot keep up with demand. 
• Power cuts such as “load shedding” in South Africa. 
• Inflation – As things get more expensive, knowing that you can go off-grid and never pay for electricity again into retirement gives many peace of mind when it comes to living off their savings.
• More government initiatives, tax benefits, and financing options.

Solar Awareness

It would seem that the overall awareness of the pros and cons of solar energy could be a reason for Portugal lagging behind neighboring countries. When looking at some search engine results using Google Trends, we see that there are fewer Google searches for the term “Solar” in Portugal compared to neighboring countries that rank closely on the PVOUT list, such as Spain. While this may not be sufficient evidence to prove that interest in Portugal is lower purely due to the lack of awareness, it does show that interest is exponentially higher in countries such as South Africa, where daily power outages have sped up the adoption of solar backup solutions. A clear example of what happens when you are too dependent on things which you have no power over. 

That being said, Portugal has more potential than most countries worldwide, so the fact that the adoption rate is lagging behind neighboring countries is a slight shame. Hopefully going forward, more residents become aware of the future potential problems that may arise with the dependency on the grid leaving a catastrophic impact on the economy, such as the ongoing crisis in  South Africa.  

If you want to read more about the daily multi-hour power cuts in South Africa, then have a look at our previous blog, written from the perspective of someone who has lived through it.

To conclude, Portugal stands at the cusp of a solar energy revolution. With the right regulatory changes, financial incentives, and increased public awareness, Portugal has the potential to emerge as a global leader in renewable energy, tapping into its abundant solar resources and paving the way for a sustainable and greener future. 

Disclaimer, This article is not financial advice. It is purely meant to be educational and an informed opinion of the author.

References

Solar Resource Maps of Portugal (no date) Solargis. Available at: https://solargis.com/maps-and-gis-data/download/portugal (Accessed: 08 September 2023). 

Image map used : © 2020 The World Bank, Source: Global Solar Atlas 2.0, Solar resource data: Solargis.