Czech follows Spain in deciding to tax output from solar power

The Czech Senate has approved controversial new laws to end subsidies for renewable energy and to extend a tax levied on solar power plants in a vote on Friday. PVTech reports that the motion – proposed in reaction to inflated consumer energy prices – was successfully passed in the lower house of parliament in mid-August, and was widely expected to pass the upper house.

It means that renewable energy facilities switching on after December 31, 2013, will not receive the feed-in tariff or any other subsidy payments, but  owners of solar power plants installed after 2010 will have to pay a 10 per cent tax for the full life of each power station. The law will also exclude small and residential systems under 30kW – the most recent  recipients of state-supported PV installation.

The new laws – which fail to make any provision for net metering for self-consumption – have been vocally opposed by the Czech solar industry, which argues that rising power prices are a consequence of FiT rate mismanagement, rather than the fault of the solar industry. The changes must now gain approval from Czech president Milos Zeman before they are ratified.

The move to stem solar growth follows that of the Spanish government, which in July announced a “support levy” on solar power as part of a series of new taxes on green energy. The levy, passed in August, effectively charges a fee – 6 Euro cents per kilowatt-hour – for electricity generated by grid-connected solar panels or other renewable sources and used on-site.

“Charging a fee for generating your own energy sounds absurd,” admitted BNEF’s head of solar analysis, Jenny Chase, last month. “But in the long term, passing a higher proportion of the cost of running the grid to low-income customers is also unpalatable,” she said. “Compromises will need to be made on this issue in more countries than just Spain.”

Indeed, like the proposed Czech solar tax, Spain’s solar levy aims to help fund a €26 billion debt to power producers which, built up over the years through regulating energy costs and prices.

As Bloomberg reported, the levy makes self-generated solar power more costly than electricity bought from the grid, “rendering such systems uneconomical” – a fact one Madrid architect has since attested to, having removed his own rooftop PV panels after only six months of use, when it became clear that the cost of generating his own clean energy no longer added up.

“Neither was it possible to leave the panels on his Madrid home without connecting them to the electricity grid,” reported Reuters; “that would have risked an astronomical fine of between €6 million and €30 million.”

Spain’s Industry Ministry, whose July power reforms included income limits for clean-energy plants, said the new levy was needed because grid-connected solar energy consumers also benefitted from the back-up provided by the power system, reports Bloomberg. It was also aimed at controlling growth in rooftop solar, the government arguing that Spain already has too much generation, since total capacity exceeds peak demand by more than 60 per cent.