Solar players dispute forecasts

Finance Minister Miroslav Kalousek is considering abolishing a five-year tax holiday enjoyed by solar power plants, as well as other sources of renewable energy, as a way to rein in the rapid expansion of renewable plants.

Renewable energy sources have enjoyed tax breaks and fixed prices that are above the normal cost for electricity, as part of a government and EU-wide plan to increase the share of renewable energy sources in the overall energy portfolio. Along the way, however, investors have flooded the market with license applications and land grabs, developing plants as fast as they're able to get locked-in rates for the next 20 years.

"There are currently about 620 megawatts of solar power installed [in the Czech Republic]," said Jaroslav Míl, president of the Czech Confederation of Industry, in comments to the daily Hospodářské noviny (HN). "By the end of the year, there should be an additional 700-800 megawatts."

Both the government and energy giant ČEZ, in which the state owns a controlling share, have faulted the solar boom in particular for their forecasts that predict a 15 percent or 22 percent increase in consumer electricity prices next year, respectively. The government estimates companies will see bills rise by 19 percent.

Zuzana Musilová, of the CZEPHO solar association, told The Prague Post her organization disagrees with those forecasts, which the association's website characterizes as "deliberately overstated."

But shutting smaller investors and other companies out of future subsidies will only stand to benefit ČEZ, whose plants will create nearly one quarter of solar energy output by the end of this year, or companies that have already been locked into the feed-in tariffs, Míl said.

As a shareholder, the state benefits from any advantage ČEZ has on the market, raising questions from smaller renewable energy companies and even the current government's opposition.

Senator Alena Gajdůšková of the Social Democrats called the connection between solar power and the steep rise in electricity prices cited by the government and ČEZ "a lot of humbug" in comments to the daily Právo, adding that the numbers being used just don't add up.

Kalousek told HN he expected abolishing the tax holiday would bring in hundreds of millions of crowns to the state budget next year. In the meantime, for subsidies that have already been locked in by existing solar power plants, Kalousek said he is looking at a way to pay that bill to avoid affecting consumer prices so much.

"We are looking at finding a compensatory mechanism that could take money from public funds to pay entrepreneurs in the solar energy field," he said.

Claire Compton can be reached at
ccompton@praguepost.com