Overhaul of electricity 'time tariffs'? Solar power changes the debate

ELECTRICITY could become cheaper to use at more convenient hours in a hypothetical about-turn for household bills – and that's thanks to solar power.

Since June 2021, 'peak', 'trough' and 'off-peak' time slots were introduced by Spain's main power board Iberdrola – and sparked numerous neighbour disputes.

'Off-peak' or 'flat-rate' slots were to cost the same as all power use around the clock had been until then, with the cheapest and most expensive times attracting a price difference of up to 95%.

Lowest-cost electricity is between midnight and 07.59 in the morning, at weekends, and on national holidays, whilst the times to avoid are from 10.00 to 14.00 or 18.00 to 22.00 from Monday to Friday inclusive.

At a time when energy bills were starting to climb, residents began putting their washing machines on overnight in a bid to make ends meet, financially – and falling foul of their neighbours for disturbing their sleep.

Arguments about this between residents in adjoining properties and apartment blocks appear to have died down – perhaps because the population has got used to sleeping through a neighbour's washing machine, or has been forced to put their own on overnight, too, or because of newer appliance models being generally quieter.

On the whole, though, the new pricing structure has been inconvenient for many reasons: Cooking dinner in the evening has to be done at peak time, unless you are willing to eat very late - even allowing for the fact that Spanish people tend not to sit down to their last meal of the day until at least 21.00.

All this could be set to change, though – and the sun is single-handedly responsible.

Early afternoon is when energy production costs fall, argues CNMC

The National Markets and Competition Commission (CNMC) says the 'massive invasion of solar power' as a source of the mains electricity supply means the hottest parts of the day automatically generate the most energy.

Even when mornings and evenings are still chilly, most of Spain has a strong midday sun – in many parts of the country, temperatures similar to high summer can strike at lunchtime even in deep winter, with the remainder of the day and night being freezing cold.

This means the cost of energy production is at its lowest between noon and 16.00, the CNMC says, and is calling for this slot to be the cheapest for bill-payers.

The renewable energy industry is also calling for a 'reorganisation' of peak and off-peak power use times.

“Historically, demand for electricity was at its lowest overnight,” explains José María González Moya, director-general of the main national 'green' energy association, APPA Renovables.

“To this end, prices reduced when there was less demand, and increased when demand was greater, such as in the middle of the day.

“But things have been changing for a while now. With solar power in particular, we've seen that the hours in the middle of the day are when it's cheaper to produce energy, whether it's a weekday or a weekend.”

Weekends cost less to the end user because demand falls – industry and business activity reduces, meaning the majority of energy produced is used by domestic consumers.

Current time slots 'discourage use of renewable energy'

“Solar power means there's often considerably more supply than demand during daylight hours. Yet, overnight, electricity generated from gas, which is much more expensive to produce, is being 'sold' more cheaply to consumers,” continues González Moya.

As well as leading to a greater reliance on gas than on solar, it means the industry is selling itself short by charging less for a more pricey power source.

Another key factor in the price of electricity is the cost of transport and distribution; peak and off-peak slots were partly designed to fit in with this. 

Transport and distribution fees are reviewed every six years, along with the price of power storage, whilst also taking into account rising numbers of off-grid homes and businesses. The last time this happened was in 2020, but it is likely that a mid-term analysis will be carried out in the next few months.

Household bills reflecting the true cost of production is not the only reason the APPA Renovables wants to see a tariff slot overhaul.

“By encouraging people to use electricity at night, you're also encouraging them to use electricity generated from gas – because there's no sun at night - and wasting solar energy supply,” says González Moya.

Solar power is much kinder to the environment and a crucial player in the battle against climate change, but it is less used, since it is produced during peak consumer times – which does not make any sense, González Moya argues.