Producers of Electricity from Photovoltaic Energy in Spain: A Structural and Financial Analysis

Abstract

[Abstract] The environmental scope of electricity generation that results in lower production costs and greater economic benefits is a main concern for planning post carbon cities. We perform a comparative economic and financial analysis of Spanish firms in the sector of photovoltaic energy production to, in order to check the impact of regulatory changes in the industry, and to compare firms in A Coruña and Galicia in the Spanish context. The effect of changes in regulation are obvious in terms of investment: In Spain and Galicia, more than 90% of the firms were launched in the decade of 2000s, and no asset increase by existing firms is observed in recent years. Firms launched in Galicia in that decade were relatively very small, and barely generated any employment. 95% of the firms in Spain are micro enterprises, but the structural analysis shows the negative impact on the competitiveness of the sector in Galicia of lacking large or medium companies. Finally, the exploratory statistical analysis shows a counter-intuitive result in terms of profitability: despite micro Galician firms have lower operating margins and generate a lower economic return than their Spanish counterparts, they are more profitable in terms of their return to shareholders.