From pv magazine 01/23
Arguably the most politicized and vilified energy source in the Czech Republic, solar looks set for a long-awaited comeback. The country’s first wave of PV growth came in 2019 on the back of a generous feed-in tariff (FIT). Almost overnight, Czechia became the third largest solar market in Europe, with about 2 GW of generation capacity. However, progress has been hampered by a series of retroactive interventions that have undermined the solar business model, including a 26% solar tax introduced, the government said, to take advantage of price inflation. retail.
“In 2010, the government mishandled green energy regulations,” said former environment minister Martin Bursik, who founded the Czech green investment subsidy scheme. “The coal and nuclear industries, and some politicians, have used it for a massive offensive against renewables. As a result, we only have a 14.5% renewable energy share in our electric mix today.”
That’s partly because utility scale PV projects have been banned for years and excluded from large renewable auctions. “With the current energy prices, even if the government launches solar auctions there is no interest from investors,” said Jan Krcmar, chairman of the Czech Solar Association (CSA). CSA data shows that only 158 MW of solar was added in the five years from 2017 – with a measly 5 MW installed that year for the entire country.
The International Renewable Energy Agency estimates that Czechia’s 2.1 GW of solar at the end of 2020 will be 13 MW less than a year ago, making it one of only two countries in Europe with a reduction in the PV fleet. Former minister Bursik, who is now chairman of the Czech Renewable Energy Chamber, says that “there is a kind of mental barrier that there is not enough solar and wind in the Czech Republic to cover our electricity needs and to -decarbonize. That is, until now.”
Many reasons
Two factors are driving the Czech solar recovery: high energy prices and strong subsidies. Czechia last year approved CZK 14 billion ($613 million) in solar funding in key support programs. The New Green Savings Program established in 2015 provides capital subsidies for residential rooftop PV. Cash for commercial and industrial (C&I) arrays is available from the Recovery and Resilience Fund which was launched in March 2022, and has been stocked up several times since, with €300 million ($318 million) available so far.
A local engineering, procurement, and construction services company said that the C&I rebate offers a three-year return on investment so “the question arises as to whether the money could be better spent elsewhere, because the solar is never a risky investment.” Long delays in processing the 4,000 or so C&I subsidy applications filed by mid-October will be a deterrent.
“I would not say that the rebates are too generous,” said Radek Orsag, CEO of the local distribution company SolSol and a member of the presidency of the Accumulation and Photovoltaics Guild. “Now we are getting up to 35% capex [capital expenditure] subsidy for solar installations and up to 50% rebate for storage systems. However, this may look generous under the optics of today’s energy prices. “
Demand for battery storage is high, driven by an aging grid network. “The Czech low-voltage grid still runs at an asymmetric rate and has phase metering installed in homes, which means that each of the phases is measured individually, and that makes it difficult to make any good economy of self-consumption without the battery,” said Orsag.
“Therefore, 95% of rooftop solar installed in the Czech Republic has a battery. We are talking about about 50,000 batteries in 2022, each at least 10 kW, so this is about 500 MW of storage capacity only in the sector of There is also a combination of subsidies for heat pumps and photovoltaics that can reach up to €11,000 to €12,000 and this is an interesting proposition.
New law
The Czech government is looking to improve regulation to accelerate the development of rooftop PV. The limit for mandatory building permits increased from 20 kW to 50 kW in December and an amendment enabling energy communities and energy sharing is expected to be introduced in mid-2023. The business model of energy community tested in Prague with 20 households allowed to share excess solar electricity and only pay distribution fees. Prague’s energy sharing community is expected to drive more than 500 MW of rooftop solar and include 10,000 EV chargers this decade.
Net metering is also expected, with suburban areas offering more rooftop potential. “Since the Communist era, Czechs have had a tradition of building chalets and cottages where they usually spend their weekends,” said former minister Bursik. “As we introduce the concept to a prosumer, they will be able to install PV in their homes on the weekend and benefit from the sale of solar electricity during the week, in their apartments in the cities. We expect a big improvement in these micro and mini installations and it is also important for building trust among the converts.
Interest in utility-scale solar is also building, thanks to the Modernization Fund established by the EU in 2021 to help 10 member states upgrade their grids and meet their 2030 energy targets. Amid high energy prices and pressure on manufacturers to improve performance in environmental, social, and corporate management, CSA chairman Krcmar says large-scale solar is competitive even without subsidies.
The result is that companies that built projects 12 years ago in Czechia are now back. “They have built all over the world, from Poland to Australia,” said Krcmar, “and now they are coming back to build here in the Czech Republic and have already applied for subsidies. But while some have been destroyed, most of the projects are now in the pre-permitting stage.”
Big PV plan
EU modernization funds are assigned through competitive calls and prioritize projects in former coal mining areas. Projects can insure up to half the cost of purchasing and installing solar up to a maximum of €280,000 per megawatt of generation capacity.
Czechia secured funding for 622 MW projects in the first round of funding, ranging from hundreds of kilowatts to dozens of megawatts. More than 200 sites sought more than CZK 10.4 billion in EU cash in the second call for projects, which closed in October.
“The utility scale sector is difficult to predict but at the moment we have around 6 GW of grid reservations,” said SolSol chief Orsag. “Some of these projects will not be built due to permit issues. However, we can safely say that next year Czechia will become a gigawatt-scale market and that about 2 GW to 3 GW of installations will be built between 2023 and 2025.
Currently, almost 98% of Czech solar arrays are on roofs. About 50,000 households applied for the New Green Savings subsidy last year, according to government data, more than four times as many as in 2021. A year described as “absolutely groundbreaking” by the government saw 380 MW of residential applications, with an average size of 7.5 kW. Commercial systems are expected to deliver more than 100 MW, and could take off this year. “Homes and businesses are finally seeing solar as the best way to lower their energy prices,” Krcmar said.
Trouble in the making
The sudden increase in demand has led to a shortage of skilled workers, especially installers. CSA Chairman Krcmar says the solar association is working on certifications and training programs to address the growing problem of untrained “YouTube installers.”
The utility scale PV sector is also not without problems. While the Czech electricity transmission system operator and distribution system operator say that 11 GW of solar will be connected to the grid by 2030, it is difficult to say how much generation capacity is in the pipeline for investors checking the grid.
Czechia does not have a transparent system where investors can check whether or not grid capacity is available in a specific location. As a result, they sometimes apply for the connection of many capacities throughout the country to see where they need to buy land and this can, in turn, block the system.
“Another problem is spatial, or zoning plans, which are a local political decision,” said Krcmar. “Some local politicians do not want solar or wind behind them. So if you go through that stage, which can kill the projects, then you enter the classical authorization procedure where not everyone in the Czech Republic of local councils and approval offices received the memo that the Czech Republic wants to build more renewables.
Krcmar added that there are reports that project developers face “ridiculous obstacles” when they try to get projects approved. “We are really afraid that maybe half of the projects that have been selected to receive subsidies, through the Modernization Fund, will not be built,” he said. “That, in turn, will prevent investors from entering the Czech Republic and it will kill the Czech solar market before it takes off properly.”
Krcmar said the government should act quickly and cut red tape to avoid such a dire scenario from happening. Under the terms of the national energy climate plan, the government aims for about 4 GW of solar capacity to be installed by 2030, up from the current 2.6 GW. Prague acknowledged that the target was somewhat conservative and likely to be exceeded by some distance. While there are still some catch-ups needed to improve public acceptance and ease regulations, the clock is ticking on the Czech energy transition.
“This decade is the last big window of opportunity for the Czech Republic,” added Bursik. “Never, ever in the future will there be such large funds available for reforming our dirty, fossil fuel-dominated energy sector.”
This content is protected by copyright and may not be reused. If you want to cooperate with us and want to reuse some of our content, please contact: editors@pv-magazine.com.
