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A blow to photovoltaic energy

Daniel FutejRudolf Sivak

On December 15 2010, an amendment to the Act on Promotion of Renewable Energy and High-Efficiency Cogeneration No 309/2009 Coll. was passed in the Slovak Parliament. The key parts of the amendment came into effect on February 1 2011, with some less material parts becoming effective as of April 1.

The amendment introduces the following important changes.

Responsibility for deviation

Under the new rules, a regional distribution network operator will assume responsibility for deviation only in case of facilities with installed output of less than 1MW or less than 100KW in case of photovoltaic plants. Before the amendment, the responsibility for deviation was until 4MW of installed output.

Premium

In the case of photovoltaic plants, this form of support will apply only to electricity produced by installations:

(i) located on the roof structure or the outer wall of a building associated with the ground through a solid foundation; and

(ii) with a total output not exceeding 100 KW.

Until the amendment becomes effective, the threshold for support was 10 MW; thus this change represents a dramatic decrease. Photovoltaic installations not meeting the above conditions will not be eligible for premium. In order to mitigate the negative impact of this legislative change, it will not apply to photovoltaic power plants with installed capacity of less than 4 MW with:

(i) a building permit which became enforceable and final before February 1 2011; and

(ii) a decision on operation of the photovoltaic plant issued before July 1 2011.

The deadline of July 1 stirred up fierce acquisition and building activity in the photovoltaic power plant market.

Stricter rules for modernisation or reconstruction

The amendment introduces stricter rules in order for a facility which undergoes a modernisation or reconstruction to be eligible for support. The costs of modernisation of reconstruction have to be higher than 50% of the investment costs for acquisition of a comparable new technological part of a facility.

Abolishment of limitation in change in prices

Before the amendment, the price of electricity set by the regulatory office for network industries for a given period could not be lower than 90% of the price valid in the previous period. This limitation will no longer apply in case of electricity produced from solar and wind energy. Hence, the prices of electricity in these two cases may be lower than 90% of the price in the previous period.

The amendment does not affect installations which were put into operation before February 1 2011, and rules effective until that date will apply to such installations.

Daniel Futej and Rudolf Sivak

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