Czech solar power firms expand in Hungary while government plans decarbonisation

Photo: Miloš Turek

The combination of a slow-down in state subsidies at home and an increased demand for solar power in Hungary is leading many Czech companies to set up to invest in the country. However, the Czech government’s plans to reduce and eventually completely remove carbon dependency has led some to promote the benefits of increasing support for photovoltaics in the country.

Photo: Miloš Turek
While less than 10 megawatts worth of new solar farms were built in the Czech Republic in the past five years, in 2018 Hungary’s photovoltaic power stations grew by 320 megawatts.

Altogether, the state currently has 700 megawatts worth of combined photovoltaic sources and this amount is expected to increase substantially in the near future, the news site iHNed reports.

Hungary’s photovoltaic association estimates that licenses allowing the construction of up to 2000 megawatts worth of photovoltaic energy sources have already been issued.

According to one of the investors iHNed spoke to, the current purchasing price for one kilowatt of produced solar energy in Hungary is around CZK 2.50, while the cost of constructing a source worth one kilowatt lies at CZK 15.

This relatively low cost of construction compared to profits makes it an attractive investment for some Czech businesses active in solar.

One example, iHNed reports, is NOVA Green Energy, which invested EUR 5 million into a recently finished 15 megawatt solar park in the Southern Hungarian city of Barcs. NOVA is the subsidiary of the investment group Redside, which is currently negotiating the purchase of a license to build a new 30 megawatt plant in Hungary.

There is also Photon Energy, the largest Czech investor, which is planning to increase its energy production share in Hungary to 75 megawatts by 2022.

However, some of their business competitors are viewing Hungary with caution. The director of the investment company Verdi Capital told iHNed that it is wary of political risk and fears potential interventions by the Hungarian government into tariff rates. Verdi Capital is instead looking at solar markets in Spain or Italy and has already invested into wind energy in Finland.

Despite Hungary’s ongoing growth, the country still lags behind the Czech Republic in the amount of photovoltaic power sources. Czechia’s solar energy boom started more than 10 years ago, but the country’s system of supporting photovoltaic construction was criticised for leading to many cases of subsidy fraud.

Photo: Miloš Turek
According to the news site iDNES, this bad experience has made Czech officials hesitant to issue calls enabling companies to get subsidies for photovoltaic power plant construction, despite the fact that EU money is available.

However, the renewed push to move away from fossil fuels could bring back support for solar. On Tuesday, the government approved the creation of a commission tasked with cutting down coal production. Its target is to reduce the share of coal as an energy source to 10 or 15 percent by 2040.

Czech Minister of Industry and Trade Karel Havlíček told Czech Television this week that the success of this plan is very much dependent on activating other energy sources.

The largest domestic professional grouping of photovoltaics companies, the Czech Solar Association, is already attempting to persuade the ministry to make European subsidies more easily accessible.

The programme director of the Modern Energy Union Martin Sedlák, has spoken in favour of solar as well.

Earlier this week, he told Aktuálně.cz that the government’s decarbonisation plan needs to include Czech households, 300,000 of which still use coal as a heating source. This, he said, could be done through a government pledge to place solar panels on at least 290,000 homes by 2030.