16th July 2021

Chamber of deputies approves reduction in support for solar power and expansion of the solar levy

Solar levy

In the final reading Czech MPs agreed to a number of things including an expansion (increase) of the solar tax for photovoltaic power plants. For photovoltaic power plants from 2009 this means reintroduction of the levy in the amount of 10% for feed-in tariffs and 11% for green bonuses. For photovoltaic power plants put into operation in 2010 this would increase to 20% and 21%.

A new mechanism, however, should ensure that the IRR for photovoltaic power plants does not fall beneath 6.3% even with the solar levy in place. This should be achieved by setting a maximum volume of electricity to be subject to the solar levy.

ROI review and IRR

The Chamber of Deputies also approved introducing a review on ROI that will check whether supported sources are drawing support in amounts that could be considered excessive.

For photovoltaic power plants this means an IRR of 6.3%. None of the proposals to increase the IRR threshold values passed – although MPs originally approved MP Jurečka’s amendment proposal increasing IRR to between 8.4% and 9.5% for non-fuel RES and between 9.5% and 10.6% for fuel RES (177 present, 94 for, 19 against), as a result of a protest by MP Výborný a new vote was taken on the same proposal, which got a majority of all votes present (177 present, 73 for, 18 against) and therefore the proposal did not pass. The final form of the act did change in the section on the decision on setting individual conditions for support. If a producer requests the highest volume of supported electricity in its request to set individual conditions for support and the request is granted, the total volume of supported electricity for that producer will be set for the entire period until the end of the plant’s lifespan, with no restriction on volume of supported electricity for a particular year. The original wording said that support would be provided in one year only for the volume corresponding to the ratio of the volume of electricity in MWh as stipulated in the decision and the number of calendar years between when the decision was issued and the end of the plant’s lifespan.

The amendment will soon be presented to the Senate. It is possible, however, that the Act on Supported Energy Sources will undergo further changes with the amendment to the Energy Act, under discussion as of yesterday in its third reading in the Chamber of Deputies.

We will continue to monitor developments as they occur and keep you up to date on any changes that take place.

Members of the American Chamber of Commerce in the Czech Republic