Pre-election Prague says solar power too expensive

The EU's demand for alternative energy sources actually drove down prices. [Centre for Alternative Technology/Flickr]

Producers of solar electricity should pay higher taxes, according to the Czech government. The sector says the issue is being politicised before the elections. EURACTIV.cz reports.

The Czech government is considering increasing taxes imposed on producers of solar power because of high expenditures on renewable energy support.

The cabinet asked Finance Minister Ivan Pilný (ANO) last week to follow up on the matter.

“It is time to look into the option of solar tax increase, how to make the profits of ‘solar barons‘ more adequate,” said Foreign Minister Lubomír Zaorálek who is the election leader of the Social Democrats (ČSSD) in the October parliamentary elections.

“Such hackneyed phrases about so-called solar barons are nothing but a pure populism. From the politicians’ view, it is timely scheduled before the elections,” the chairman of the board of the Czech Solar Association Jan Fousek told EURACTIV.

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Solar barons

“Solar barons” is a nickname broadly used mostly for operators of large solar power plants in the Czech Republic.

The saying appeared after a solar boom between 2009 and 2010, which occurred because of a steep decline in the price of photovoltaic panels and the inability of lawmakers to adapt feed-in-tariffs for solar power to such development and reduce the support. That resulted into higher priced electricity for consumers.

A 26% solar tax was introduced in 2010 for photovoltaic power systems over 30 kW, which were put into operation between 2009 and 2010. It should have originally expired in 2013, but was prolonged until the end of the power plants’ lifetime and lowered to 10%.

Over the last three years, support for renewable energy through feed-in-tariffs and premium tariffs reached more than €1.5 billion annually. Part of the expenditures are covered by the state budget. Electricity consumers pay for the rest.

The government intended to provide almost €1 billion from the state budget in 2018 for the renewable power and heat support, but has interrupted the debate about this issue last week. The cabinet should get back to the matter on Monday (4 September).

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Problem solved

Minister Zaorálek also pointed out to a statement by the European Commission, which said that the payback period for solar systems is “almost inadequate”.

Such statement should supposedly be one of the results of a complicated 2015-2016 negotiations with the Commission concerning the notification of renewable energy support schemes.

But the representatives of solar sector claim there is no such statement about an inadequate support for photovoltaics.

They stress that the ministry of industry, which is responsible for energy policy, enforced the prolongation of solar tax in 2013 arguing that this measure would eliminate any overcompensation.

“The Commission arrived to the same conclusion during the notification process. It says that the solar tax was calculated in such a manner, that the resulting payback period was set according to the law,” said Fousek.

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More stability

Last year, the generation of solar electricity fell by 6% in comparison to 2015, and solar power represented 2,77% in the Czech energy mix. The installed capacity of solar power plants has been slowly growing since 2011, reaching 2,047 MW at the end of 2016.

Wind power plants produced less electricity than in 2015, falling by 13%. The installed capacity has stayed the same for already three years (282 MW), as no new power plants have been constructed. In 2016, wind power accounted just for 0.63% in the energy mix. It is mainly because of the lack of financial support for new projects, Chairman of the Czech Chamber of Renewable Energy Sources Štěpán Chalupa said.

Representatives of the renewables sector expect the environment for their business to be more stable in the upcoming years.

So far, they have been in a continuous disagreement with the Czech Energy Regulatory Office chaired by Alena Vitásková, one of the most vocal critics of the financial support for renewables. As of August, the mandate of the chairwoman ended and she was replaced by a Council consisting of five members.

The “minister of industry has satisfied the appeals by stakeholders from various sectors that the composition of the council must be balanced,” Jan Fousek said.

The new government which will come after elections will have to deal with the EU negotiations on the Clean Energy Package proposed by the Commission in November 2016.

“It is important that besides Brussels and the global turn to the renewables, it is also the citizens who will push the government towards clean energy,” Štěpán Chalupa said. According to Chalupa, people are starting to realise that it is profitable for them to use renewable energy.

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Czechs in favour of renewables

Although the public image of renewables was rather negative in the past, a recent poll by the Public Opinion Research Centre (CVVM) showed that two thirds of Czechs agree that the use of renewable energy should be financially favoured by the state.

Chalupa said the new cabinet can follow up with the steps taken by the current government.

“It has carried out several important changes in the subsidy programmes, such as the launch of support for roof photovoltaics operated by municipalities or entrepreneurs, more favourable conditions in the boiler subsidies programme or the successful New Green for Savings (programme focusing on energy savings and renewable energy sources in family houses),” Chalupa stated.

Renewable energy producers are also calling for auctions on new capacities to be introduced in order to replace feed-in-tariffs abolished in 2013. But the ministry of industry claims there is no need for operational support, as the Czech Republic has already met its EU 2020 target of 13% RES share on energy consumption.

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