The Spanish region of Castilla y León plans to extend its environmental impact tax to large-scale photovoltaic installations from 2027 under a draft bill on tax, financial and administrative measures.

The proposed reform would expand the scope of a tax currently applied to wind farms, hydroelectric reservoirs and high-voltage power lines. Fixed telecommunications networks would also become subject to the levy.

According to the draft legislation, the changes are intended to reflect the evolution of economic activities in the region and ensure greater neutrality and fairness in the taxation of activities with similar economic objectives and potential environmental impacts.

The bill identifies solar farms as installations that can affect landscapes, flora and fauna, occupy land and alter traditional land uses.

The regional government justifies the proposed tax by invoking the European Union’s “polluter pays” principle. It also notes that Castilla y León is a net exporter of renewable electricity, meaning that local communities bear some of the environmental impacts associated with electricity generation for consumption elsewhere.

Under the proposal, solar farms would be taxed according to the surface area they occupy. The tax liability would remain in place even after a facility ceases operating, until it has been fully dismantled and the site restored to its original condition.

The draft legislation also sets out exemption criteria for certain self-consumption installations. Ground-mounted self-consumption systems occupying 5 hectares or more would qualify for an exemption only if the ratio of contracted power capacity during the P1 peak tariff period to installed generation capacity is at least 50%.

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