Value-rent-finance in Spain's solar transition

Abstract

In this paper, we analyse Spain's market-based transition to renewable sources of energy, focusing on solar power. In recent year's Spain's energy transition has been viewed as a successful model in which producers have moved away from a reliance on state subsidies in the form of Feed in Tariffs. Instead, solar electricity generation in Spain has been fostered through careful regulation, a dramatic fall in the cost of solar modules produced in China, and readily available, high-quality land on which the infrastructure of solar farms can be constructed. The value relations through which these shifts have taken place are complex. We therefore deploy an analytic (originally developed to make sense of the financialisation of water infrastructure) to tease out the internal relations between value, rent and finance in a moment in which fictitious capital is actively pursuing rents in the Spanish electricity sector. In the case of Spain's solar boom, those rents are found both in the form of ground rents and in the form of interest-bearing capital. Drawing on empirical data from a range of different projects, we trace out these different income streams and relate them back to a broader critique of political economy. Our analysis presents a critical analysis of the totality of the solar economy. In addition, we show the power relations structuring that economy, from producers in China to landowners in Spain. Finally, we develop an analysis attuned to the geographical transfer of value across space while recognising the differing material properties of resources and lands.

Introduction

Alcarràs, a Catalan language film directed by Carla Simón, portrays the struggle of one family of peach farmers in rural Catalonia desperately trying to keep hold of the land that they have farmed since the early twentieth century. Their landlord, Pinyol, is hoping to transform the land into a giant solar farm, and the family ends up split over whether to embrace this change, taking jobs among the new eco-precariat, or to continue to farm for peaches with all the insecurities and threats that this livelihood entails. Very quickly, that choice disappears. Solar panels are installed around the farm, diggers move in to uproot the family's peach trees, and all three generations are forced to confront an uncertain future. While the film could easily slip into a romantic portrayal of a dying way of life being superseded by a technology-driven transition, the drama is careful to draw out a host of complex relations that span space and scale. The family farm is heavily dependent on an itinerant African immigrant labour force, paid low-wages, and with no job security. Quimet, the protagonist, is simultaneously caring and a stubborn, domineering patriarch. Pinyol's family, we later learn, were sheltered by Quimet's predecessors during the Civil War: use of the land was promised to the family in a loose verbal agreement for eternity by Pinyol's father as a way of thanking this risky cross-class generosity. Underlying the film's deeply humane account of the changing fortunes of the peach farmers is “a continuous throb of anxiety” (Bradshaw, 2023). This anxiety revolves around the form the energy transition ¹ is taking in Spain, one deeply embedded in market mechanisms and reliant on low wage labour and land in both China and Spain. Quimet, along with many others in Spain, finds himself enrolled in processes well beyond his control. While the violence of land expropriation is clear and direct, as seen in the diggers that surround the family home, the abstract compulsion of economic relations, expressed in the form of land politics and the narrow range of choices available to the family, represents a far more sinister backdrop. ²

As the film shows so vividly, Spain is currently undergoing a particularly rapid, market-based transition to renewable sources of energy. The country's National Energy and Climate Plan, crafted in 2021 and revised upwards in 2023, now commits the national government to ensuring 48% of total energy consumption through renewables by 2030. In large part, this target is to be achieved through generating 81% of electricity from renewable sources (Energía y Sociedad, 2023; MITECO, 2023). While these numbers should be seen as a source of genuine hope in the face of climate breakdown, Spain's transition continues to be plagued by contradictions: an initial boom, fostered by government subsidies in the form of feed-in tariffs (FITs), crashed when these FITs were ended in the austerity years; more recently, dramatic reductions in the price of solar modules – driven by China's industrial organisation of the global value chain – have fostered a second boom and a new wave of struggles over land in Spain.

We therefore approach the Spanish transition as a dialectical contradiction: “two seemingly opposed forces are simultaneously present within a particular situation, an entity, a process or an event” (Harvey, 2014: 1). As Harvey reminds us, such contradictions, when confronted by capital, are never resolved but, instead, are displaced geographically. When the mining of fossil fuels in nineteenth century Great Britain appeared to resolve a contradiction between competing uses of land (for biofuel and food), those energy sources now anchor a new contradiction between resource use and climate change (Harvey, 2014: 4). In turn, efforts to harvest the energy of the sun to free capitalism from its reliance on fossil capital are now displacing this contradiction back to the land.

The centrality of land to the transition is evident throughout Spain. Utility scale solar PV – the type of project being installed on Quimet's farm and, currently, the dominant form of solar development in Spain – is incredibly land hungry, owing, in part, to its low power density (Smil, 2015). ³ Thus, as the solar frontier expands, issues of the technical suitability of land, its availability, and the property relations through which access to land is structured, are front and centre. Famers are being displaced from land that is well-suited to large scale solar PV across Spain, sometimes through state-mandated expropriations (Morris, 2023). At the same time, given the lower profitability of solar PV, land is simultaneously being used as a financial asset for value transfers. Thus, the present energy transition is taking us back to the land in several contradictory ways. Analysing these contradictions, we seek to develop a value theoretical approach to Spain's energy transition. Following Elson (1979: 123), for whom “the object of Marx's theory of value…is an understanding of why labour takes the forms that it does”, we apply value theory and rent-theoretic approaches to better understand why Spain's renewable transition “takes the forms that it does”. ⁴ Such an analysis sheds light on how the abstract compulsion of economic relations (see Postone, 1993) shapes the solar transition in Spain.

We begin by laying out a conceptual framework through which to analyse the phenomenal forms of value as they manifest within the global solar value chain. This conceptual framework is developed in conversation with a previous paper we co-authored Purcell et al. (2020), in which we deploy an analytic that sheds light on the internal relations between value, rent, and finance. Alongside this conceptual framework, we develop a methodological approach that works across continents to understand geographical transfers of value. Developing a “global conjunctural frame” (Hart, 2024) allows us to attend to both organic processes of capitalist transformation and the historical and geographical specificities of Spain's own transition. We begin by laying out this conceptual framework and our broader methodological approach before turning to the current transition, tracing out its many determinations, and following the global solar value chain upstream to Xinjiang, China, and downstream to rural Spain.

Value, rent, and finance in the energy transition

In an earlier paper Purcell et al. (2020), we developed an argument that an understanding the political economy of resource use in the current conjuncture requires an analysis of the internal relations between value, rent, and finance. Bringing these three categories together within a single analytic has often proven challenging. Hence, as Christophers (2018) notes, Marxist approaches to financialisation sometimes appear distanced from a labour theory of value. The apparent separation of the real economy from the financial economy is thereby reproduced within the terms of the analysis. And while research on rents – and rentier capitalism (Christophers, 2021) in particular – has analysed the capture of surplus profits, these discussions have also been divorced from questions of value. Positing either finance or rents – or finance as rents – as the characteristic aspect or defining feature of the current conjuncture is to neglect the historically specific ways in which these different aspects (value, rent, and finance) relate to one another. Our response (ibid.) was therefore to conceptualise a “value-rent-finance” triad:

“Just as land and infrastructure are treated as financial assets, their commodification is predicated on rent. In this phenomenal form, value is extracted from various forms of private monopoly which, in turn, are actively sought out by fictitious capital” (ibid.: 438, emphasis in original)

Although applied to the specific case of water financialisation, we wrote that “the triadic structure…can also serve as a general analytic with much wider applicability in other geographies and in relation to other resources” (ibid. 438–9). Already it is clear that the Spanish transition presents a complex tangle of value, rents, and finance. The price of solar modules is mediated by the abstract socially necessary labour time involved in their production and installation. The raw materials needed to produce these modules are extracted from land that is structured according to specific sets of property relations overseen by the state. Because land and labour are relations of class struggle rather than technical inputs, such relations may or may not facilitate value transfers in the form of rents to landowners (Kerr, 1996). Project finance for utility scale solar PV tracks both the price of solar modules and land values. And Power Purchase Agreements (PPAs) ensure that a guaranteed revenue stream becomes possible from newly installed solar plants. Whether to buy land, rent land or sell land depends on decisions made in relation to this complex entanglement of value, rent, and finance. If electricity poses certain challenges that differ from water, the value-rent-finance triad helps to untangle some of these more complex relations.

In developing the value-rent-finance analytic, Purcell et al. (2020) we drew inspiration from Diane Elson's (1979) hugely influential essay on “a value theory of labour”. The latter is often remembered for Elson's “reversal of terms” (see De Genova, 2023: 2) as she moves from a labour theory of value to a value theory of labour. Nevertheless, the careful approach through which Elson arrives at such a reversal is perhaps more important. The categories used within a Marxist approach need to be understood, Elson argues, as themselves “still to be determined” rather than given. Focusing on labour, she therefore argues that different “aspects” of labour crystallise in distinct ways in different conjunctures. While underdeveloped in Elson's classic essay, these abstract compulsions derive from the essentially indirect relations of commodity production that organise social reproduction through the accumulation of capital (Postone, 1993; Iñigo Carrera, 2007), particularly evident in the case of ‘global value chains’ (Starosta, 2010). When addressing the international geographic scope of the solar economy, this directs our attention to the private and independent form taken by social labour as the compulsion structuring everyday life. On this basis, we can understand why Quimet's family sees no way out of its predicament aside from the depressingly obvious choice of each member selling their labour-power as part of the eco-precariat.

Following this approach, we position rent as a phenomenal form of value that takes on a particular role in relation to historically and geographically specific circumstances. Applying this to the case of Thames Water, in Purcell et al. (2020), we set out to understand how fictitious capital expands rapidly at a distinct moment in the history of capitalism – a moment many associate with financialisation and one that is intimately related to what Fine (2013) refers to as “the extensive and intensive expansion of Interest Bearing Capital”. Fictitious capital then actively seeks to capture value transfers in the form of rents. In the case of Spain's solar transition, however, the challenge lies in being able to work across the geographies of China and Spain while also attending to the specificities of a land hungry transition in which rents are being captured both in a more general sense, through the structuring of PPAs, and in a more specific sense through the historical geographies of property ownership in Spain.

Elson's nuanced understanding of the historically specific way in which different aspects of labour become dominant within different moments can be read alongside a more geographically inflected analysis. To understand the geographical transfer of value we need to think spatially, across global value chains, and ecologically, paying attention to the material specificities of different lands and different sources of energy. Therefore, going beyond the site-specific form of infrastructural financialization that inspired Purcell et al. (2020), we deploy the value-rent-finance triad to interrogate the abstract compulsions of relative surplus value production (Charnock and Starosta, 2018; Postone, 1993), through a geographically inflected global conjunctural frame (Hart, 2024). Before introducing the recent histories of Spain's solar transition, it is therefore important to reflect on some of the broader contours of global energy transitions, while positioning these in relation to historically and geographically specific circumstances.

From fossil capital back to “the flow”: Land hungry transitions

As dramatised in Alcarràs, the current energy transition is placing a far higher demand on existing land resources in comparison to a fossil fuel based energy system. Vaclav Smil's (2015) pioneering work on power density has been crucial in making sense of this relationship. Smil (ibid.) first lays out his understanding of power density:

“Power is simply energy flow per unit of time (in scientific units, joules per second, which equals watts, or J/s = W), spatial density is the quotient of a variable and area, and hence power density is W/m², that is, joules per second per square meter.” (2015: vii)

He then goes on to calculate the power densities for different energy sources, situating these within the historical and geographical trajectories of their various uses. What emerges is very clear evidence of the higher land requirements of renewable sources of energy. While Smil is acutely aware of geographical differences in power densities, Pearse and Bryant (2022) remind us that focusing on power densities should not occlude the equally important question of the varying quality of different lands. Indeed, “power densities are a form of abstraction, like the notion of energy itself, that permits rationalisation and comparison but flattens historical and geographical contexts” (Ibid: 1885). Attending to such geographical specificity requires a focus on differential rents because capitals competing to produce on superior quality lands for their higher solar yields, and therefore lower production costs, can be forced to pay a higher rental price to the landlord who can skim extraordinary profits in the form of differential ground rent. ⁵ In doing so, we also take the value-rent-finance analytic beyond monopoly and absolute rents that are captured from fixed urban infrastructure. This permits further geographical sensitivity towards the uneven and non-reproducible elements of nature that underpin solar landscapes. As we show in more detail below, this helps to draw attention to class conflicts that can arise in and around the varying quality of land on which renewable energy infrastructures are located for the energy transition within Spain.

Critical solar perspectives have tended to focus less on the political economy of land rents and more on “land-grabbing” as a response to this intensified competition for land. Pressure on land for renewables has been seen as driving rural, and racialised, land dispossession in the global South (Stock, 2023). While these accounts are often empirically useful, we find ourselves agreeing with Huber (2022: 5), who writes that “the history of capitalism is one of overt land dispossession—where property is obtained by direct grabbing—whereas this process [the appropriation of land for renewable energy projects] is often conducted through market exchange (even if it comes with its own kind of coercion).” In one of the few critical pieces focusing on land in the solar transition that sits outside the “land-grabbing” literature, Hornborg et al., (2019) rebuke eco-Marxists who, the authors argue, view energy technologies not “as contingent on global exchange relations but as ‘free gifts’ of nature to capital.” This gentle rebuke appears to be levelled at Malm (2016) who does indeed draw on Marx's notion of Gratisnaturkraft, or a “free gift of nature,” to understand the peculiar political economy of renewables. In response, Hornborg et al. (2019) call for an approach that attends to the “price” of embodied land and labour needed to produce the infrastructures through which apparently free gifts of nature might then be captured. Theirs is a challenge to the “machine fetishism” that they see within both Marxist and non-Marxist accounts of the energy transition.

For Hornborg et al. (2019), while the low power density of solar itself requires large areas of land to be converted into solar farms on the island of Cuba itself, their contribution centres on “ecologically unequal exchange” (EUE) resulting from the low prices of Chinese land and labour in the energy transition which generates the asymmetric transfer of material and energy embodied within the solar panels themselves. Through the example of Cuba, the authors argue that land and labour are already embodied within those technologies before they are installed. In the case of most European countries, for example, solar technologies are dependent on huge amounts of land and labour being transferred from China's vast industrial landscapes of solar PV production. Hornborg et al. (2019) therefore position their argument against accounts that obscure these asymmetric value transfers captured in EUE. This spatial extension of the notion of power density does help to disrupt more simplistic accounts of solar as a “free gift of nature”, but their account veers toward a mischaracterisation of “orthodox Marxists.” For example, Malm's (2016) approach surely represents one of the most nuanced accounts of why the material properties of different energy sources will have radically different implications for an energy transition enacted through technologies (the steam engine in particular) embedded within specific sets of social relations. Nevertheless, while defending Malm's (2016) overall approach we find it surprising that he makes no reference to rents. Indeed, his analysis of the ways in which capitalist social relations prevent “a return to the flow”, would undoubtedly benefit from a deeper understanding of the relations between value, rent and finance across the global value chain.

More recently, Brett Christophers (2024) has drawn on the broad argument developed in Malm's (2016) Fossil Capital to show “why capitalism won’t save the planet”. While the falling price of electricity generated by renewable sources would suggest that wind and solar will rapidly replace coal, oil and gas as the main sources of energy powering the global economy, Christophers shows how ongoing doubts about the profitability of renewable electricity generation mean that such a transition, without state support, will continue to be plagued by difficulties. Again, profitability within the sector is partly related to the investment profile of an energy source that requires high upfront costs, even while apparently relying on the “free gift of nature” that is the sun or the wind. While “the solar dominance hypothesis”, widely accepted from the mid 2010s onwards, implies that a solar transition is all but inevitable, Christophers (ibid.) has demonstrated the centrality of state support. Yet, if Malm has thus far sidestepped the question of rent, Christophers’ empirical analysis of profits can be read as a step back from questions of both value and rent. By not taking up the movement of value in his analysis, we have a partial picture of the apparent fragility of this transition. One of the more telling examples of these inner connections is how the global solar economy touches down in Spain, we therefore turn to this case in greater depth.

Spain's two solar booms

Appearing to confirm Christophers’ broader argument, Spain has observed a massive development of solar PV in the past two decades, following key interventions by the state. Broadly speaking, we see two key periods of expansion: from 2007–2012, and from 2019 to the present. In 1998, the country was one of the first in Europe to establish an internal market for electricity. The ensuing liberalisation of the power sector saw electricity generation unbundled from transmission and distribution. In effect, this unbundling created a market driven system for wholesale electricity prices and a government regulated system for distribution and transmission. The former included policies financing the promotion of renewables through new regulations and premiums to support the profitability of private firms.

In establishing a system of Feed in Tariffs (FITs) in the early 2000s, the Spanish government supported renewable energy generation through subsidising green energy producers. Under a socialist government, a 2007 law (Royal Decree 661) was passed that doubled FITs for installations with a capacity of between 100 kW and 10MW. While generously increasing the FIT, the law removed any quotas on PV electricity production. As Mir-Artigues et al. (2015) emphasise, from mid 2007 to late September 2008, Spain witnessed a remarkable tenfold increase in PV deployment. Indeed, while the Spanish Renewable Energy Plan for 2005–2010 set a target of 400MW for Solar PV, installed capacity actually reached 3921MW by 2010 (Gómez et al., 2016).

During 2008, Spain accounted for almost half of the new solar capacity being installed worldwide. This massive expansion, which led to serious overcapacity, took place over a period in which hardware costs remained high by present-day levels and in which Chinese producers were just beginning to emerge as genuine rivals to their European competitors. Nevertheless, even in this first “gold-rush” moment, there was a strong correlation between new installed capacity in Spain and Chinese PV cell production output with Yingli, the leading Solar PV firm in China, sending 67% of its panels to Spain in 2008 (Huang et al., 2016). By 2013, the costs of solar PV hardware and panels had decreased by 65% from the levels reached in 2008. Paradoxically, while most of Spain's first solar boom took place over a period when costs were high, the bubble had burst by the time costs had fallen to new lows.

Drawing on Rio and Mir-Artigues (2014), Christophers (2024) argues that the crucially important decision to increase FITs in 2007 was intended to stimulate what had been a sluggish renewables sector. Nevertheless, it relied on the assumption that three key factors would remain stable: technology costs; capacity investment; and electricity prices. Instead, the cost of technology fell, investors piled in, and the price of electricity fell. Crucially – and in a classic case of a conjunctural moment – Spanish developers traditionally active in construction sectors sought to take advantage of the high FITs to make up for a collapse in demand for housing during the financial crisis. While Spain was able to increase the supply of electricity generated from solar and wind from 9% in 2007 to 24% in 2013, the government found itself owing increasing amounts to producers while consumption was falling because of the financial crisis (ibid.).

By 2012, with governments across Europe rolling out austerity budgets, Spain sought to address what was reported to be a €24 billion tariff deficit in the renewables sector (Fernández-Gonzalez et al., 2022). Feed in Tariffs were swiftly ended, and this first period of expansion ground to a dramatic halt. The situation worsened in 2015 when the conservative administration of Mariano Rajoy approved a solar tax (impuesto al sol) (Real Decreto 900/2015) on small collectives who might wish to connect to the same installations. While this form of “self-consumption”, or autoconsumo, represented a relatively small proportion of the overall supply, it demonstrated the Rajoy administration's antipathy towards the energy transition, a divergence from broader EU policies, and it also led to a broader wariness within the sector around the fickle nature of government policy.

The election of a PSOE administration under Pedro Sanchez in 2018 led to a further U-turn, this time back towards solar PV. Sanchez's government overturned the solar tax while setting increasingly ambitious targets for wind and solar. The National Climate and Energy Plan, initially drafted in 2020 (MITECO, 2020) and updated in 2023 (MITECO, 2023), embodied this new enthusiasm for solar from the Sanchez administration. Around this time, solar energy reached grid parity (meaning it was at least as cheap – and often cheaper – than competing sources) in Spain (IRENA, 2022). In energy industry parlance, grid parity is measured by producing a single price across energy sources known as the Levelized Cost of Electricity (LCOE). The LCOE combines investment and operation costs and is defined as the average cost of electricity per unit of electricity output. Space restricts a critical discussion of this concept (see Christophers, 2024), but as we show below the LCOE is significant as the price signal which has guided private investment in solar PV development. From this perspective, the enthusiastic promotion of solar PV by Spain's (then) Minister for Ecological Transition, Teresa Ribera, made commercial sense. In addition, conjunctural factors, such as the energy spike resulting from the Russian invasion of Ukraine and a massive influx of funding from EU recovery programmes following the COVID-19 pandemic, have further strengthened the argument for solar.

As Gerbaudo (2023) notes, Spain's second solar boom has not relied on FITs: indeed, these have largely disappeared. Instead, investor confidence has been ensured – and price volatility reduced – through the signing of Power Purchase Agreements (PPAs), which guarantee a fixed price between producers and energy off-takers (often one large consumer and/or utility) over a set period (on PPAs, although with more of a northern European focus, see Christophers, 2021). Furthermore, the second boom differs from that witnessed in the US, which has largely been fostered through tax incentives within the Inflation Reduction Act (on the IRA and Bidenomics, see Battistoni and Mann, 2023). Gerbaudo (2023, citing Spanish economist David Lizoain) argues that the Spanish solar boom has been far more reliant on regulation, while seeking private sector investment to facilitate the energy transition. Crucially, Gerbaudo notes that, despite the latest rush for solar in Spain, investors remain wary of the previous boom and bust. As well as technical difficulties caused by poor connectivity of the Spanish grid with France, the exploitation of tensions between rural and urban regions has been exacerbated by right-wing parties seeking to maximise political capital through opposing new renewables projects. As seen in the policies adopted by the former conservative Spanish government in the 2010s, such whims can end up having a huge influence on Spain's solar economy. Nevertheless, underlying these more ephemeral shifts, there are much deeper global connections that underpin the profitability of renewable technologies. This brings us back to the larger question with which we began: why has Spain's renewable energy transition taken the form that it has and what prospects are there for a more just and lasting transition? To begin answering these larger questions we need a higher level of abstraction and, necessarily, some consideration of the materiality of different energy sources.

The global solar value chain

The international division of labour of the solar economy presupposes geographically dispersed sites of extraction, manufacturing, project deployment, operation and maintenance, financial institutions, and state regulation. These are clearly complex, heterogenous, and hierarchical class relations, but the value-rent-finance triad offers a framework through which to grapple with the indirect compulsions of abstract labour that shape the concrete labour of people across the spaces of value creation and capture. Ours is an effort to think across these different moments of capital intensity, labour intensity, and land intensity within the organic whole of the solar economy. We begin by scrutinizing the value relations of the solar Global Value Chain (GVC), with its roots in China, to tease out one of the key dynamics underpinning the profitability of solar energy in Spain – the falling cost of solar modules. Against the criticisms of Hornborg et al. (2019), this is a firmly non-fetishistic reading: we are concerned with value as a social relation and not as a thing – or a technology - per se. Our task is to study the way value mediates “the determination of the structure of production as well as the distribution of labour in that structure” (Elson, 1979: 128). Given the roles of subsidies and policy support at both ends of the solar GVC, as well as property rights and access to natural resources, this section stays attentive to the state's role in mediating what Baglioni and Campling (2017: 2449) term the “gravitational pull” of capitalist value relations.

China's impact on the global PV industry moved at an astonishing pace, establishing a position of global dominance in less than ten years (Huang et al., 2016). The solar value chain spans R&D, capital equipment production, polysilicon production, module manufacturing, balance of system (BOS) components, and, finally, PV deployment. China entered the global PV industry in the early 2000s without a domestic market to serve. So, rather than pursue import substitution, and infant industry protection, the industrial incentive was firmly towards export-promotion (Zhang and Gallagher, 2016). The impetus for export-promotion came from European demand, sparked by an explosive period of growth in installed capacity, especially from FITs in Germany and Spain. China first moved into midstream module manufacturing through the import of turn-key technology and plant facilities, focusing on modular production lines for crystalline silicon (c-Si) PV (Hart, 2020). ⁶ The productivity of capitalist firms was given a kickstart by provincial and local governments’ – seeking to boost local GDP – financing imports as well as removing the barriers of manifold rent payments by refunding land transfer fees, providing free factory space, access to raw materials, and offering cheap, subsidised electricity (Zhang and Gallagher, 2016). On the finance side, incentives included interest rate discounts on loans for capital equipment investment, and corporate income exemptions. Tax holidays for many China-based manufacturer started at 100% (Goodrich et al., 2013: 2814).

By 2007 China had overtaken Europe and Japan to become the world's leading PV cell producer, and in the next six years module prices fell by a staggering 85.8% (Yu et al., 2014: 468). ⁷ The major process innovation came from leveraging older technology to cut thinner wafers, improving module efficiency at lower prices than competitors. Intense competition in China drove the vertical integration of lower profitability module manufacturing with the higher profitability of polysilicon production and capital equipment manufacturing. ⁸ Polysilicon production is both capital and energy intensive, and Chinese firms benefitted from competition between regional governments looking to attract solar manufacturing through access to raw materials, low energy costs, and cheap labour. Xinjiang – well known for reports of potentially forced labour of the Uyghur population (Murphy and Elimä, 2021) ⁹ – became one of the major sites for capital intensive polysilicon production. By this time, Chinese firms had already begun manufacturing their own capital equipment after reverse engineering machines purchased from German firms during their aggressive expansion into China's booming solar sector (Hoppmann, 2018). Low equipment costs became a key source of competitive advantage, pushing out German firms, and further driving down module prices as industrial agglomeration took shape in the form of bespoke manufacturing clusters (Hart, 2020).

To give an empirical indication of the different scales of production and capital intensity with China's closest competitor, the average manufacturing scale of US-based factories in 2013 was 500MW, four times smaller than Chinese factories operating at 2000MW (Goodrich et al., 2013: 2815). Even in states like Australia, where abundant raw materials abound, it is estimated that the mining of polysilicon would be at least two times more expensive and, not least, that it would take roughly six years to build a new polysilicon production facility (Foroohar, 2023). World leading industrial organisation was already in place when central state policies were introduced for the first time in the fallout from the 2008 global financial crisis. The huge macroeconomic stimulus plan in China included the extension of credit lines to solar firms worth more than $US 40 billion (Hart, 2020). Thus, the “Golden Sun Demonstration Project” provided subsidies covering 50–70% of total investment costs in PV projects, while also stimulating domestic demand and installation with FITs and direct subsidies for the domestic market (Sun, 2020). By 2014, China was ranked 1^st in the world for PV module production, with a 74% global share of the market and a 43% share of polysilicon production (Zhang and Gallagher, 2016). The specialised literature tends to fetishise industrial scale and supply chain organisation, downplaying labour costs and state support, as the central lever of China's competitive edge (Goodrich at el, 2013; Yu et al., 2014). However, it is also clear that access to flexible and cheap labour has facilitated rapid automation in China. Due to less “protective labour-laws”, companies can “ramp production up and down in response to the market”; producers are particularly cost competitive in the most labour-intensive activities of wafer manufacturing and polysilicon production (Zhang and Gallagher, 2016: 2016). By 2022 China was the top global exporter of manufactured solar PVs: competitive manufacturing costs reached less than $0.24/W (Chadly, 2024), a staggering 94.9% price reduction from the costs in 2007 of $4.73/W.

Returning to our value-theoretic premise, and, once again, abstracting from these many details, increases in the productivity of labour across the solar value chain came from Chinese firms excelling at process innovation and mass industrial scale manufacturing. Individual capitalist firms increased productivity and reduced costs of production at each stage of the ‘value chain’. As such, much like China's broader role within the new international division of labour (Weksler, 2023), the turn to module manufacturing, polysilicon production and solar equipment machinery, has been driven by relative surplus value production. The important point here is that an increase in the productivity of labour – from increasing capital intensity – led to a larger quantity of use values produced within a certain time period, while leaving unaltered the total amount of value (Marx, 1991 [1894]). In this sense, the ‘price’ of solar panels does not conceal embodied land or labour time (pace Hornborg et al., 2019) but is determined by the socially necessary labour time within that branch of production. When individual values fell dramatically below market values in this branch of global production, the difference is captured as profit in production when selling at world market prices. By 2012 the price of solar modules from a Chinese manufacturer was already 23% lower than the closest US competitor (Goodrich et al., 2013: 2815). Postone (1993: 289) refers to this as the “treadmill effect” of capitalist value relations which compels producers to adopt new methods of production and drive down socially necessary labour time, until a new base level is reached setting the normal levels of production in the sector.

Such a tendency has important ecological consequences for ‘global value chains’, when viewed as a form of industrial organisation rather than the bilateral exchange of resources (Althouse et al., 2023). As already noted, commodities do not exchange at their labour values. Instead, they exchange at prices of production, a competitive process that equalizes profit rates between branches with different capital intensity. In this way, competition redistributes surplus value towards the more capital-intensive firms and sectors, what Marx sardonically calls “capitalist communism” (cited in Harvey (1982: 63), allowing individual capitals to claim a larger share of the aggregate surplus value. In other words, unequal exchange is the necessary and normal functioning of price formation in a competitive capitalist economy. This pattern of surplus value distribution has been the basis for ever cheaper solar modules, underpinning the competitiveness of China's solar firms in their capacity to respond to booming downstream demand in Europe, before rolling out the highest level of global domestic installation capacity. While this was enabled by local and then central state industrial policy, ramping up the productivity of labour through technological change, increasing capital intensity (in the Organic Composition of Capital), and pursuing ever larger scales of production were central to the competitive ‘successes’ of China's solar boom. In sum, in China's production of solar modules, we witness the tendency towards concentration and centralisation of capitalist production in the pursuit of profits (Vasudevan, 2021).

The flipside of this picture has been the well-documented global overproduction of solar modules, and the ensuing profitability crisis across the entire global value chain. While China began rolling back subsidies in 2019 (Dong et al., 2020), European manufacturing firms have faced closures and job cuts. Unable to compete on price with Chinese suppliers and, pulling back from import tariffs due to geopolitical and consumer pressures, EU module production plunged from 9 GW in 2022 to just 1 GW in 2023 (IRENA and ILO, 2024). At the same time manufacturers in Europe reported accumulated stock of over 500 MW of modules, which they were unable to sell at a price that covers costs (Yuen, 2023). By 2024, price wars and overcapacity in China saw solar panel prices hit an historic low of $0.10/W, while the IEA predicted that the global supply of solar PV will be three times that of expected demand (IEA, 2023). The concrete form of the abstract value compulsions can be seen in the restructuring of the solar international division of labour, which is now firmly ensconced in Chinese production. By 2023 only 5% (43,000) of total EU solar jobs were found in manufacturing and, unsurprisingly, 87% (715,000) were found in the deployment phase (Solar Power Europe, 2024). ¹⁰ While installation demands a substantial workforce, these jobs rely on the sustained roll-out of land hungry utility scale solar farms as well as investor appetite from private finance. And, as a final illustration of China's dominance of the solar value chain, the deployment phase in Spain is increasingly led by the retail and installation arms of the big Chinese firms. To pursue this thread further, we move from the realm of production to that of circulation and back. Here the relationship between sectors and firms in different geographical units can be assessed further through the value-rent-finance lens.

Solar rents

This section connects revenue streams within Spain's solar boom to production (value) and land (rent) relations, before tracing out how the valorisation of solar assets – panels, land, and PPAs –functions through inflows of interest-bearing capital (finance). The aim is to show how these processes are imbricated in the geographical transfer of value (Hadjimichalis, 1984). While only hinted at by Purcell et al. (2020), for analytical purposes it is important to further separate rent in the form of interest-bearing capital from the more specific category of ground-rent, which is linked to landed property. As Best (2024) has recently argued, “rent” in much contemporary literature is often applied as a universal and simplified category. While Marx refers to the category of rent in a more universal way, this is distinct from his references to ground-rent, with the latter being rooted qualitatively and quantitatively in landed property. ¹¹ The former can be understood as rent constituted as interest on money capital, alienated by its owner to the capitalist for production, and assuming the form and movement of interest-bearing capital. The latter, ground rent, is surplus value captured through the monopoly ownership of land and is separate from interest payments on other forms of rent-bearing property (e.g., money capital and assets). A failure to appreciate this distinction, as Manning (2022: 81) argues, can be detected in research inspired by contemporary notions of rentierization and assetization that conflates “land with other interest-bearing assets, and claim[s] they all yield ‘rents’ and are controlled by ‘rentiers’”. Huber (2022: 7) echoes this criticism of the literatures on ‘rentier capitalism’, warning that geographers should heed the analytical distinction between landowners as rentiers and capital as owner of the means of production. In so doing, Huber argues, analyses will be more sensitive to the class relations shaping the difference between profit and rents (see also Purcell, 2024). Staying attentive to these class relations, we now show how fictitious capital – as a claim on future value – seeks out both forms of rent throughout the two solar booms in Spain.

Ground-rent and solar booms

In the first solar boom, value transfers from the state occurred through administratively set prices that were designed to send the correct ‘price signals’ for renewable development and investment. ¹² When the 2007 Royal Decree 661 almost doubled the FIT rate for installations between the capacity ranges of >100 kW and <10 MW, developers building huertos solares (solar orchards) began aggregating smaller systems together rather than building one large plant (del Rio and Mir-Artigues, 2014: 13). While the tariff level was designed for costlier and smaller systems, this land-use tactic allowed developers to achieve the economies of scale of larger systems while capturing the financial rewards of the generous FIT. What we detect in this example is how, in responding to price signals set by the FIT, developers reduced production costs through land-use tactics and, with leases already in place, were able to capture a portion of windfall profits as ground-rent that would have otherwise gone to landowners through an increase in rental prices. This initial wave of value capture from subsidies and low land rental prices goes some way to account for the role played by well-positioned developers in the resulting policy-led investment boom as well as the drivers of downstream demand for PV modules met by imports from China.

In a study covering the determinants of profitability of 67 solar PV plants across the changing architecture of government policies, from tariff incentives starting in 2002 to the reduction of economic incentives in 2012, Guaita-Pradas and Blasco-Ruiz (2020: 11) find that solar PV plants became especially profitable, with returns above 10%, by 2010. This was preceded by a 25% drop in initial investment costs a year earlier. By 2012 profitability hovered around 15% with the most significant factor being “the large decrease that the cost of the installation has registered due to technological improvements” (ibid: 11). Studies from the specialist literature confirm that the bulk of costs for PV power plants are composed of supply and installation (Menédez and Loreno, 2019). ¹³ Up to 90% of the cost of setting up a solar PV is taken up by the capital costs of installation, of which around 50% comes from the cost of modules. The prices of the latter, driven by China's entry into the value chain highlighted above, fell by around 90% between December 2009 and December 2022 (IRENA, 2022: 9).

Subsequently, when Decree 661 was revoked in 2012, location rather than size became more significant. A new adjusted tariff was introduced, differentiating zones by solar irradiation and thereby “increasing the rents for solar PV plants in better locations” (del Rio and Mir-Artigues, 2014: 21). For solar land use, therefore, competition over what can be read as differential rents – the monopoly over lands with locational advantages – drove up land prices in zones of high irradiation. By 2018, subsidy free solar was able to compete in wholesale markets and pure merchant projects, those selling electrons to wholesale markets, subsequently attracted new investment. The major boom, however, has been led by new PPAs which provide both long-term contracts and guaranteed revenue streams. Thus, from a bleak mood that had engulfed the sector between 2013 and 2017, a new boom ensued in 2018/19, which ramped up demand for new land rentals. For Christophers (2022, also 2024), PPAs have been central to providing the security through which project finance for renewables might be unlocked. Building on, while also critiquing, the work of Gabor (2021) among others, he demonstrates how, in a post-subsidy environment, PPAs have been crucial to “derisking” renewable energy projects, thereby making them viable investment opportunities. In the case of Spain, we show how PPAs have also been crucial in ensuring future revenue streams and thereby facilitating “the expansion of interest bearing capital in both intensive and extensive form” as Fine (2013) defines the process of financialisation. We expand on this point in detail in relation to the Don Rodrigo plant in the following section.

Because solar is land hungry, the preferred strategy of developers has been to avoid the high upfront costs of large-scale land acquisition by creating new types of rental agreements with landowners. ¹⁴ Typically, the land is rented for the 25-to-30-year duration of the PV power plant. Land rental prices can range from €1000 to over €2000 per hectare (UNEF, 2024), with higher premiums for the best locations. These figures significantly outstrip the average rent of €300 and €700 per hectare for rainfed and irrigated agricultural lands respectively. It should be noted here that the Spanish Ministry of Agriculture (Ministerio de Agricultura, Pesca y Alimentación, 2024:2) estimates that the total surface area of solar farms in Spain is slightly over 47,000 hectares of land (which would be equivalent to 0.2% of useful agricultural land (superfície agraria útil) and an estimated total of 0.38% will be needed to meet the national targets.

The quantity of agricultural land turned over for solar farms has increased since 2012 and competition for sites within areas of specific locational advantages is a key driver of higher land prices and the displacement of farmers. ¹⁵ We have already established that the falling price of solar modules is rooted in the tendency towards concentration and centralisation of capitalist production in the pursuit of profits. Falling prices have also led to increases in the average size of both solar farms and solar panels. These increases in scale have renewed demand for land in Spain. ¹⁶ The lower power densities of renewable technologies have subsequently resulted in a competitive struggle to access increasing quantities of land. Where and how land is used, and on what terms, is geographically and socially contingent. Crucial in the case of utility scale solar PV development are considerations around levels of solar irradiation, the distance from substations, the angle of slope, the distance from roads, distance from urban areas, and pre-existing land use (Rediske et al., 2019).

For example, the province of Burgos, in the region of Castilla y León, has witnessed the highest spike in land purchase prices across Spain increasing 21.5% since 2015, and reaching around €9000 per hectare – higher in some cases (Bécares, 2024). According to Gabriel Delgado, general secretary of the agrarian union, UPA, there are lands in Burgos that used to sell for €4000 to €6000 per hectare, which are now going for €17,000 (ibid). In the cases of Extremadura, Castilla Leon and Castilla la Mancha, Infolibre (2023) reported a per hectare rental price of agricultural land turned over to solar developers of €1300–€1800 per year, while rainfed agriculture stood at less than €300 per hectare per year (InfoLibre, 2023). ¹⁷ Elsewhere, in the Basque Country, the PV developer Solaria is renting land for €1500 per hectare per year and buying plots of land for €25,000 per hectare (EITB, 2024). Developers, looking for plots of land of up to a thousand hectares, compete for land situated in the regions of Spain with the most hours of sunshine. However, not all land is equal, and location within high irradiation regions matters. The site needs to be within range of the evacuation points set up by Red Eléctrica (REE) ¹⁸ and prices are bid up if the land is located near to an electrical substation. Many of the farmers in these areas are not landowners, and much less land is therefore available for their crops: they are being squeezed out by landowners selling, or holding on to, land for renewable land leases. Throughout these landscapes, the rising price of land is derived from the capitalised rental stream of utility scale solar leases, with differential ground-rents for premium solar lands being captured by landowners. Rising land prices, however, have gone in tandem with falling capital costs, so much so that as solar PV entered a new post-subsidy period it became price competitive with fossil fuels.

The first post-subsidy utility scale solar park: Don Rodrigo

The combination of lower capital costs, location, grid connection and a competitively priced PPA laid the basis for Spain's first utility scale solar park built without subsidy, the 175 MWp Don Rodrigo power plant in Seville, Andalucía. The plant was completed in 2018 and championed by the German developer BayWa r e. (2019) as the “ultimate proof of being able to produce renewable energy at lower costs than any other form of conventional generation without any government subsidies or state support.” Owned by a German insurance firm, Munich Re, the plant is managed on their behalf by Munich Ergo Asset Management (MEAG), another German firm offering specialist investment services in the equity and debt of solar parks in Spain. Fortuitously, planning delays amidst the first solar bust reduced costs for the Don Rodrigo project. The land on which the project is situated, acquired before the previously outlined jump in land prices, is leased from four local farmers as well as from the local Catholic Church, the Order of San Juan de Dios. Overall, the plant covers 270ha of land, leased at the comparatively lower rates of €961/hectare (Gifford, 2019). The original request for grid connection was submitted in 2012. This was prior to dramatic falls in the cost of solar modules, which – as noted earlier – came down in price by 20% year on year between 2012 and 2018. This was crucial because module prices accounted for 50% of the project costs between 2012–2018. Modules were sourced from two companies, Astronergy (a subsidiary of the larger CHINT Group Co., Ltd) and GCL, both headquartered in China. With a projected lifespan over 30 years, it was calculated that the plant would be able to deliver electricity at a LCOE of €25/MWh, a very competitive price when measured against Spain's projected wholesale electricity prices of between €50/MWh and €70/MWh (BayWa, 2019).

Project developers BayWa secured €100 m of construction bridge financing from German commercial bank Norddeutsche Landesbank, on the condition that the project qualify as investment grade for long-term financial investors by securing the necessary revenue streams through a PPA (BayWa, 2019). A 15-year PPA signed with Norwegian utility StatKraft, Europe's largest renewable energy producer, guaranteed power prices at €47 per MWh. The large margin between the LCOE and the price guarantee in the PPA – roughly double – meant that the project developer was more than willing to agree to a slightly lower price for an agreement operating over a longer timescale. Alongside the falling price of solar modules and the length of the PPA contract, ecological and infrastructural conditions were crucial. According to BayWa's (2019) own assessment, the Don Rodrigo site benefitted from high levels of solar irradiation, relatively flat ground, and the possibility of a nearby grid connection (a feature that Christophers (2024) argues should be interpreted as a key cross-subsidy from the state).

The case of Don Rodrigo provides a microcosm of value-rent-finance relations that underpin post-subsidy commercial viability of the PPA in Spain. First, we see how the value relations of solar module production cut capital costs; second, we witness the contingent influence of land (costs and location); and third, a competitive PPA secured financing and shaped the commercial viability of the project. Taken together, this meant the project could attract interest bearing capital and was ultimately sold by the developer BayWa to the German insurance firm Munich Re. While the sale price of Don Rodrigo was not publicly disclosed, comparable industry benchmarks suggest that a 175MW solar farm would range between €122.5 million and €175 million (Statista, 2024). ¹⁹ Based on energy production costs and the pricing of the 15-year PPA, Munich Re stands to achieve an Internal Rate of Return (IRR) of around 7–8%, largely in line with industry benchmarks. In purchasing this asset, the owner had made an interest-bearing capital investment to receive an annual rent, which has “absolutely nothing to do with the production of this rent” (Marx (1991[1894]: 944–5). Instead, purchased as a “rent-bearing asset” (Arboleda and Purcell, 2021), through the circulation of interest-bearing capital, the owner is tapping into an underlying cashflow based on the revenue stream guaranteed by the sale of electrons. While our conjunctural analysis accounts for the ability of this solar PV project, with a PPA in place, to generate profit and rents, we are cautious about drawing generalisable conclusions. Recent and ongoing activity in the Spanish solar economy indicates the growth of blended PPA and merchant utility-scale projects, where a portion of PV electricity is sold competitively to electricity markets (IEA-PVPS, 2024). ²⁰ These trends, at least in the Spanish solar economy, call for further scrutiny of profitability constraints (Christophers, 2024) and for caution, given the dramatic fall in module costs, regarding the malaise of module overcapacity for the downstream portion of the value chain (Alami et al., 2023). Indeed, what is relevant for our approach is how value-rent-finance relations across the solar economy mediate the organisation of renewable energy production and how analysing these relations helps us to tease out the uneven geographical value transfers that lie behind surface appearances.

The financialisation of solar land: Fictitious capital and rents

Since 2022, a noticeable shift has taken place in the actors investing in Spanish solar. This must also be understood in relation to the different streams of rent (both ground-rent and rent more generally) these actors are able to capture. With many of the larger utilities having committed to an ambitious rollout of solar projects, the dramatic rise in interest rates since early 2022 has led to an increase in the cost of borrowing from commercial banks. Keen to avoid any further borrowing, utilities such as Iberdrola have sought to attract new investors through offering minority stakes in newly created portfolios and holding companies. Known as “Yieldcos”, many renewable energy companies have separated renewable energy assets into publicly traded entities by selling equity stakes. This allows firms to raise new capital while providing investors with stable, long-term cash flows from energy production. In 2023 Norges Bank, the entity responsible for managing the vast Norwegian sovereign wealth fund, signed an agreement with Iberdrola to acquire a 49% stake in a portfolio comprising solar and wind farms in Extremadura and Castilla y Léon (PV Magazine, 2023a). ²¹ The alliance was expanded in 2024 with a commitment to a reach a total capacity 2500MW (in solar and wind) with over €2 billion planned investment in the Iberian Peninsula (Iberdrola, 2024). Elsewhere, the Abu Dhabi based green investment fund, Masdar, recently acquired a 49.9% stake in 48 solar farms in Spain owned by the Italian utility Enel through its Spanish subsidiary Endesa (Moore and Sciorilli Borrelli, 2024: online). Masdar is largely made up of the Abu Dhabi sovereign wealth fund. As the Financial Times reports of this latest purchase:

“The Spanish deal is the latest example of how cash-rich buyers from the Gulf states and the US have swooped to buy up swaths of Europe's renewables sector from owners that have trimmed their growth plans in a higher interest rate environment” (ibid.)

In August 2023, Cinco Días (Hernández, 2023) reported on the large number of new investors entering the Spanish renewables sector, noting not only the role of the Norwegian sovereign wealth fund but also other large debt infrastructure funds from Blackrock to the Japanese public employee pension fund. Debt infrastructure funds, often linked to sovereign wealth funds, have provided an alternative source of funding and – in many cases – resulted in a shift away from debt towards equity holdings from investors. When Spanish engineering and energy group Abengoa entered insolvency proceedings in June 2022, after the unravelling of a €6 billion debt restructuring process, high interest rates were confirmed as a major risk to the continued development of the sector. During the period when companies in Spain signed long-term deals to sell renewable energy at guaranteed FIT rates, Abengoa borrowed heavily taking advantage of cheap credit and financial investor demand for solar assets. However, following Spain's regulatory changes, international investor appetite dried up while buyers of new solar projects became scarce (Nelson et al., 2016: 88–9). To deal with debt and cash flow issues and monetize its assets, Abengoa created a ‘Yieldco’, now called Atlantica Sustainable Infrastructure, which lists its renewable energy assets across Europe, Africa, North and South America. However, debt obligations in Spain overwhelmed their ability to generate cash flows and, in 2023, a Spanish judge awarded Abengoa to the Spanish renewable energy company Cox Energy, valuing the firm at €564 million (Reuters, 2023). From the value-rent-finance optic, the case of Abengoa shows that the inner relation between rent and the circulation of interest-bearing capital (Harvey, 2014) is a fragile one, and that “as a form of fictitious capital, the hoped for revenue stream to be captured as rent many never materialise” (Purcell, 2020: 443–4).

In what is perhaps a more unusual move, in April 2023, Reuters (2023) reported that Iberdrola was planning on selling 15,000 hectares of land to a holding company for an initial figure of 500 million Euros. Iberdrola, the report stated, will then lease the land back from the holding company, enabling the utility to reduce its overall debt burden and thereby lessen the impact of interest rate rises. Given the fate of debt-laden Abengoa, Iberdrola's move might be viewed as a smart one: indeed, the FT reported in July 2024 that Iberdrola's profit outlook had been raised for the year. But if there's some financial sense, the strategy also shines a light on the role landownership plays in the ability of firms to profit from the energy transition. Following our analytical distinction, through this securitisation, Iberdrola would sell 30 years of ground-rent payments in a lump sum (at a discounted value) to raise capital and reduce costs in a high interest rate environment. This process is indicative of fictitious capital in action, where future ground-rent based streams are capitalized today, enabling Iberdrola to extract value from its land holdings without forfeiting operational control. This land deal transforms a traditionally productive resource, into a financial asset, reinforcing the case that fictitious capital seeks to extract rent from various assets, including land for renewable energy infrastructure. With the scale of solar farms only set to increase, the sale of land as a rent-bearing asset prefigures future conflict given that fictitious capital circulating in Spain's solar economy will seek to feed off the land through the appropriation of ground-rents.

As an example of such struggles, Iberdrola is currently involved in a legal dispute with the owner of land on which the Núñez de Balboa solar plant was constructed in Badajoz, Extremadura. When fully completed in 2020, the solar facility became the largest in Europe (Iberdrola, 2020), although it has since been surpassed by the Witnitz solar park, near Leipzig in Germany (Copernicus, 2025). According to local landowner, Santos Lázaros, who is pursuing the legal case against the utility, he agreed to rent out 525 hectares of his land – over half the land covered by the solar farm – to a company he thought was the main project developer, Ecoenergías del Guadiana (Farnós, 2024). Construction was delayed, as planning permission was sought for a period that roughly spans the years between Spain's two solar booms. By the time construction began, in 2019, potential ground-rents on Lázaros’ land had tripled to €1500 per hectare. At the same time, the landowner claims, he became aware that the utility behind the project was actually Iberdrola. As Lázaros pushed for a better deal with this much larger utility, Iberdrola made the somewhat dramatic decision to invoke a Declaración de Interés Público, permitting expropriation of Lázaros’ land “in the public interest”. In 2020, a judge declared that the expropriation of land was illegal: Iberdrola continues to operate on just 40% of the land as the case continues (Farnós, 2024). Among the twists and turns of this saga, which also involve allegations of corruption among local officials, the encroachment on protected lands (Vigario, 2024), and a concerted campaign by those – often on the right – rejecting a green transition, what becomes clear is the dramatic rise in ground-rents that took place in the period between the Spanish solar booms. The differential rents from Lázaros’ land – well situated in Extremadura with high levels of irradiation – had increased significantly, with a huge potential impact on the profitability of the project. The somewhat unusual decision to expropriate the land from someone with whom the solar farm had already entered a rental agreement flows – at least in part – from these shifts in rents.

Conclusion

The need to transition away from fossil fuels is beyond dispute. Spain, as one of the countries in Europe with the highest quality land for solar farms, has set a leading example for how a rapid rollout of renewable sources of energy can be achieved and, moreover, how it might be possible to move away from state subsidies in the process. Nevertheless, it is important to recognise that Spain's energy transition has been facilitated by a dramatic decline in the cost of solar modules produced in China. Those declines have been made possible by the vertical integration of the Chinese solar industry, taking advantage of low-waged – possibly forced - cheap labour, abundant finance, and the availability of cheap natural resources and energy. For Mulvaney (2024), this solar commodity chain reveals a history of embedded energy injustice and a much darker side to energy transitions. Others, such as Christophers (2024), note that the future sustainability of a market-driven transition is likely to be short-lived given the low profitability of renewable sources of energy and the lack of interest among investors in such projects. Just as Malm (2016) showed that a “return to the flow” would necessitate an inconceivable change for capital, so capitalism, in the words of Christophers (2024), is unlikely “to save the planet”.

Moving beyond these generative studies, our contribution in this paper is to show why the Spanish solar transition has taken the form that it has. Doing so means understanding how the transition is mediated through the value form. The analytic we have sought to deploy draws on Purcell et al.'s (2020) value-rent-finance triad and seeks to understand not only the form the transition takes when mediated through the value form but also the phenomenal forms that value takes in historically and geographically specific contexts. Analysing geographical transfers of value, within the transformation of production in China, between China and Spain, and within the relations between landed property and financial interests in Spain, we have drawn attention to growing competition over land of specific qualities. Even if a market-led transition remains fragile, private finance has been drawn to utility scale solar PV projects in Spain because of the high levels of solar irradiation and levels of grid connectivity. But that interest has only been transformed into reliable forms of investment through Power Purchase Agreements (PPAs) and the revenue streams these are able to guarantee. Facilitated by the state, both financiers and (some) landlords have been able to exploit a historically unequal distribution of land for the capture of rents in the form of both interest-bearing capital and ground-rents.

Such an analysis differs in important way from preceding ones. First, we seek to bring together the totality of the solar economy within a single analysis. Unlike a commodity chain analysis, we remain focused on the political stakes, and we seek to critique existing relations rather than merely describing them. Second, and related, our analysis shows the power relations structuring the global solar value chain. Manning's (2022) defence of the concept of the landowning class as the third class is crucial to how we understand the reproduction of power within the value chain. Best's (2024) distinction between rents and ground-rent, enables us to be more specific about those classed social relations. Challenging the form that the energy transition is taking in Spain means also challenging both the power of landed interests and of finance. Finally, our analysis permits a geographically attuned understanding that operates across space to understand the geographical transfer of value, while also recognising the differing material properties of resources and lands. Indeed, to quote Vlachou (2002: 188), “by seeking the underlying basis of price and rent phenomena related to natural resources and conditions in value, the analysis reveals the interplay of ecological problems with the class process itself in capitalism”.

Highlights

• Presents a critical analysis of the totality of the solar economy from the experience of Spain

• Emphasises the power relations structuring the solar economy

• Develops an analysis attuned to the geographical transfer of value across space

• The first paper to deploy a value-rent-finance analytic to the solar economy