I realise my wording wasn't clear on this, but by the bubble bursting, I meant that the Spanish PV market collapsed already last year, after a leaping record (based on EPIA numbers:

• 2007: 560 MW new, ~700 MW total
  
• 2008: 2700 MW new, 3400 MW total
  
• 2009: 69 MW new (no typo!)

So, again: this new talk of a strong rate cut you highlight in the diary will affect almost only solar cells installed years ago, not ones newly installed en masse now.

The problem with very small PV installations is that they are primarily rooftop affairs.

Why do you see that as a problem?

They aren't going to fuel the creation of commercial scale energy

Again, why not?

The worst case scenario from the capacity factors given in the original legislation was 15.67% capacity factor.

Could you cite the source? (It could be something worth to bookmark.)

At that rate, you're looking at total payback in a matter of a very few years.

That's tricky. Spain re-sets the rate every year, and apply for all units, whether installed years ago for €6000/kW or installed in the near future for €2500/kW. That is the (not known in advance) degression of the rate affects the payback time. So (if Spanish prices are similar to those in Germany) a kW plant installed in Q1 2009 for €3922 would be paid back in around 9 years if the rate stayed constant, but in 20 years if there is an annual 10% reduction.

Put it another way: if you are in Spain and consider installing a PV solar cell, when you calculate whether the FIT rate will make your investment pay for itself, you have to anticipate future rate cuts by the government. Hence, even though 0.32 €/Kwh seems generous, if people suspect that there could be more sudden 25% rate cuts on the horizon, it's no wonder only 69 MW has been installed last year.

_{*Lunatic*, n.
One whose delusions are out of fashion.}