Denmark’s Ministry of Energy, Climate and Buildings has submitted to public consultation a bill to introduce a tax on the power produced for self-consumption by PV installations under net metering.
The Minister of Energy Lars Chr. Lillehol said that the faster than expected development of solar energy throughout Denmark would lead to an expense of DKK 4.9 billion ($734.8 million) in the state budget. Through the announced tax, the government hopes to reduce the above-mentioned expense to DKK 3.7 billion ($558 million).
Planned solar energy development by 2020, the ministry stated, is 918 MW, while local energy operator Energinet.dk and the Danish Energy Agency (Energistyrelsen) are currently predicting that solar installations will reach up to 1,350 MW by then.
As of Mar. 3, 2017, the Denmark’s cumulative installed PV capacity reached 854.8 MW, according to the latest statistics from Energinet.dk.
The new tax, if introduced, will be applied to all self-consumed power, which is currently exempt from VAT, the Public Service Obligations (PSO) levy that finances the country’s renewable energy incentives program, and other grid fees.
“Households, housing associations and businesses owning a PV power generator are currently taking indirect support by saving funds from taxes, that are necessary for the state budget,” Lillehol said in a press release.
Peter Ahm, the CEO of PA Energy and Danish representative to the International Energy Agency’s (IEA’s) PV Power Systems Programme, which recently revealed that there was the risk of new fees or retroactive changes for PV in Denmark, made the following statement:
“This is a clear example of the problems created by the present scheme of energy taxes and levies.
“By private investments – without any subsidies – in PV systems the government will lose income from energy taxes, as the PV electricity in terms of self-consumption will substitute taxed electricity from the national grid. The retail price of electricity is about €0.30/kWh, of which about 65 % is various taxes.
“The minister of Energy, Climate and Buildings said last Friday at a PV conference the same story, and said the loss of income was unacceptable for the government.
“He further stated that the present energy taxation complex presented many problems for the political plans for a development towards a green energy system, and that the government had initiated an analysis hopefully leading to a more flexible energy-taxation complex. He could not indicate when this analysis would be completed.”
In December 2016, Lillehol decided to close the second phase of the incentive scheme for solar (the so-called ‘transitional model’), after revealing that there were 1,660 MW of PV projects under the scheme which were unapproved due to budget issues.
The vast majority of these projects, the government stated at the time, was submitted for approval during 2016, after the transitional model was launched in late 2015. The minister claimed that, if approved, these projects would have resulted in an additional cost of DKK 4.5 billion ($659.8 million).
In December 2016, the Denmark Parliament also approved the government decision to gradually abolish during the period 2017-22 the Public Service Obligations (PSO) levy, which finances the country’s renewable energy incentives program. Starting from 2023, eventual incentives for renewables, which are currently being financed by power consumers, should be paid with the state budget.
Source: PV Magazine. Reproduced with permission.
Tax co2. Simples
What a dumb idea.
I have no issues with govt getting rid of feed in tariffs and subsidies for purchasing a system. But taxing self consumed energy is loopy.
I wonder if they will include losses in the system as self consumed?
And while you’re at it, tax self grown vegetables&fruits, household work like cleaning, washing and food preparation, as well as rain water self usage and if that doesn’t get you enough money I’d also look into taxing the entertainment activities that those householders engage in..
/sarc
Perhaps they could also tax knitting and other forms of making your own clothes. How about a tax on cutting your own children’s hair. Or cooking your own food. So many options for balancing the budget…
entertainment activities…sex
That’s f$%ked.
Just as long as corporations can continue to offshore profits and avoid company tax all will be sweat.
A country issuing its own currency does not need taxes to fund programs.
I can see Denmark using taxation to stop self generators going off-grid, but like modern politicians everywhere, they fail to understand economics and frame it in neo-lib economy speak.
If u go off grid then it will difficult to calculate self consumption This could end up pushing consumers to go off grid
In a country where 65% of the electricity charge is tax you have a very different environment than here.
I support this move, as long as the government is able to keep sufficient price differentiation between the forms.
“The retail price of electricity is about €0.30/kWh, of which about 65 % is various taxes”
No wonder people want solar.
How are they going to meter household use?
Easy 2 meters, meter solar going to the grid then meter consumption from the grid the difference one subtract from the other
That will work for the individual. I use the reading from my inverter and import export figures to “roughly” calculate my self use.
But at the utility level, household self use is invisible.
People who feed power into the public grid for a remuneration per kWh in Denmark have this power counted by a meter.
Nowadays these are so called “intelligent meters” or “smart meters”.
These meters are supposed to count what is received from the grid (as usual) but also what is
a.) produced by the householder and
b.) what is fed into the grid by the householder
The difference would be the amount of self-generated power which had been consumed on the spot (without using the public grid).
The guerilla PV (unmetered PV production) would not be taxed since it isn’t metered or registered anywhere.
The whole idea will get to complicated once batteries are involved.
Denmark has a right-wing government working against individuals under the flag of neo-liberalisation in combination with nationalism.
This leads to political/legal actions against those who don’t wear the uniform.
Thanks for the clarification.
I wonder if our “smart” meters have been/can be configured this way. Here in Oz, I am convinced “smart” meters offer little to households and much to the incumbents and in Victoria they had the gall to charge households for their meters!
I am surprised to hear Denmark has a right-wing Government. I had assumed most Northern European Countries had Liberal leaning government.
What a great idea..Tax domestic self consumption of clean energy and funnel the revenue raised to compensate the FF industry for loss of income…Could be a new LIB/NAT policy.
Shhhhh… can’t you see Mr Agile Innovation Turnbull is desperate for a new policy direction.
Should I delete the post….??
Definitely not, we can work with it! :))
I have a vision….
All those solar mega-dollars could be channeled into the the LNP’s own greed innovation programme: Direct Inaction.
It makes perfect sense with the consumer and environment getting shafted from every direction at once.
Miles your talents are wasted here, I am sure the LNP can find room for you in the innovation spin think tank.
They would have better revenue source by taxing oxygen we breath
#DeathSpiral
A couple of years ago a timber fuel tax (for home heating) was “planned”.
It never came.
The fat tax and the sugar tax were abolished as well.
New taxes are a scapegoat, they fill the papers and generate an income for politicians and ‘think-tanks’ .
Taxing stupid ideas would do away with this issue …;)
@ the author:
The link to the “PV magazin” doesn’t work.
Denmark…please say this isn’t so! The rolling out of Smart Meters here in Australia will allow the COALition to copy Denmark and once again stick it up Aussie solar households. A move to Planet Mars to live is looking more attractive.
Smart meters only measure what goes in and out of the house. The PV side is invisible without additional metering of the feed-in from the panels.
Does taxing self-consumed PV make it an income producing activity? If so, does this also mean that the cost of producing that income is deductible?
This could be a bit of a minefield for the Danish government, as it would be here.
I suspect that our generous feed-in tariffs have been tax exempt for this reason.