Czech government clamps down on solar power boom

In the Czech Republic the sun is no longer shining so brightly for solar power companies. The Czech government has just adopted new rules which threaten to sharply cut off support for the booming solar power sector.

Photo: European Commission

Solar power panels have sprouted like mushrooms following a late summer rainstorm over the last year or two. The business has boomed thanks to some of the most generous incentives for solar power production in Europe. This, combined with an unexpectedly sharp drop of as much as 60 percent in the costs of solar panels, meant it became an exceptionally lucrative business to get into.

The Ministry of Industry and Trade, which is behind the latest clampdown, says companies were recouping their costs in six or seven years instead of the 15 estimated when state support payments were originally drawn up.

But the boom has not been a subject for rejoicing, far from it. The bill for the boom has fallen heavily on electricity users who pay for the subsidized solar power and there has been uproar from homeowners and industrialists alike.

On Wednesday the Czech government decided to put a stop to the solar boom by pushing through a new framework for supporting renewable power. Simply put, the new renewables regime sets quotas for all types of renewables with an eye on the European Union goal that they should provide 13 percent of Czech energy needs by 2020.

Photo: archive of Radio Prague

The ceiling for booming solar power has been set at such a low level that Ministry of Industry and Trade officials admit that it could be met by the end of the year, meaning an abrupt halt, or at best, sharp scaling back of support. Wind power also looks like being a big casualty.

Ministry spokesman Pavel Vlček says that solar power companies are angry because the new rules will stop them grabbing so much money with relatively little renewable power provided in return. He says the new framework will share state support out more equally.

“The current situation is that the Czech Republic pays 40 percent of all the money given to renewable energy for only 4.0 percent of the produced renewable energy. So it is clear that they do not agree with this new, correct, proposal which wants to set out the conditions for all sources of energy from renewables on the same basis.”

While solar power and wind power lose out, other renewables, such as biomass, could gain from more generous support, the ministry argues.

Photo: European Commission

But the solar power companies are unlikely to take this step, which they say threatens to wipe out the sector lying down. Lawyers’ offices have already been offering their services to challenge the new framework and follow up rules. While the ministry insists it is on solid foundations, it is still sending its plans to the European Union in Brussels for confirmation.