Remember when Spain was consistently brought up as a savior of the solar industry? While it’s too soon to hand out any new trophies at this point, we can at least say that Spain’s coming back into the picture.

Although it was always overshadowed by Germany, it bore the hopes of the European solar industry once Germany had to scale back its subsidies. The Iberian nation’s days in the spotlight were, however, cut short by the Spanish Cabinet’s ratification last September of a new solar subsidy cap that was less than even half of the original 1,200 MW subsidy scheme that helped Spain to become the third-largest solar market in the world. The new 500 MW cap arrived after the government declared that the growth of solar in the country had become unsustainable, exceeding by four times the targets it had set for 2010. While advocates of renewable energy mourned and solar industrymen protested, one bright piece of speculation did emerge: according to Spain’s three renewable energy associations—AEF, APPA, ASIF—the new legislation would accelerate the decline in solar electricity prices by allowing Spanish solar companies to become increasingly competitive, with the real cost of photovoltaic production possibly becoming equal to the price of electricity by 2015. (Think this will happen anytime within the next two decades in the U.S.?)

In addition to the subsidy cut, the Spanish government also introduced changes to its solar feed-in tariffs: (for a quick primer on feed-in tariffs, see the second paragraph of this handy post from Adam)

The country’s solar feed-in tariffs are now set at €0.32-0.34 per kilowatt-hour (kWh) of electricity from roof-mounted systems and €0.32 [US $0.46] per kWh of electricity from ground-based systems. The cap and the reduced tariffs will result in a significant scale-back of the Spanish solar market over the next two years.

And now, a month behind schedule (and much to the anxiety impatience of the Spanish solar project developers and their suppliers), the Spanish government has unveiled a register of solar projects slated to receive the feed-in tariff for 2009. May the building begin!