15 October 2010


Czech Republic will impose a new solar tax

By doing so, the Czech government intends to constrain a possible sharp price-rise of electricity in 2011 as a consequence of the current solar boom in the Czech Republic. According to the Czech Premier Petr Necas, the governemt intends to reduce „extremely high and immorale“ profits earned by operators of Czech PPP.

Solar Tax

The exact amount of solar tax will be specified on October 20, 2010. However according to latest information (not officially confirmed) from the Mininstry of Industry and Trade („MIT“) the solar tax should be between 10-30% from the revenues generated by PPP. Its size will be related with the term of commissioning of a given PPP as follows:

Year of PPP commissioning: 2010 2009 2008
Solar tax size: 30% 20% 10%

The solar tax is to applied to all existing and newly built PPP in the Czech Republic irrespective of the size of the PPP.

According to Jakub Hajek, a legal advisors of the leading Czech legal office Glatzova and Co., an implementation of the new solar tax stands for a substantial change of the conditions related to doing business in the Czech Republic. “In this respect we expect a new boom of legal disputes and arbitrages between foreign investors and the Czech state”, added Jakub Hajek.

Other approved measures against photovoltaics

Representatives of the MIT also presented other measures which will ba applied (retrospectively) against the Czech photovoltaics from 2011:

• End of tax holildays for operators of PPP
• Change of write-off scheme applied to PPP (its deterioration)
• FIT will be applied only on rooftop PPP with maximum capacity of 30 kWp from March 2011
• Abolition of FIT for off-grid PV systems and for ground-mounted PPP
• 500 % increase of fees paid to the authorities for using land in order to discourage investors from building grand-mounted SSP.

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