Regulatory cuts and economic and financial performance of Spanish solar power companies: An empirical review

Spain exemplifies the development of renewable energy in general and photovoltaic solar energy in particular, influenced to a major extent by public regulation. Without suitable caution regarding the approaching world crisis, the regulatory framework gave rise to the fact that Spain would rank second worldwide in 2008 in terms of installed photovoltaic (PV) solar energy. Yet a serious financial and economic crisis still in its infancy started to lead to readjustments, while the new regulatory framework put a stop to the construction of new PV plants. Many companies and investors either went bankrupt or saw their performance levels dwindle. Although the academic literature has analyzed some general aspects related to this boom-and-bust of the Spanish photovoltaic solar sector, no studies have been carried out on a company level. In order to fill this void, this paper analyses the economic and financial performance of Spanish companies involved in photovoltaic solar energy production over the period 2006-2015. The results, based on a longitudinal population sample of around 5469 companies from the sector, show the economic hardships they have experienced, especially smaller enterprises. An improvement in the most recent situation is also noted. The international implications of the Spanish case for scholars, policy makers, investors and other stakeholders worldwide, as well as avenues for further research, are discussed.