7 March 2011


Czech PV: Termination of Czech Solar Tax

Effective Solar Lobby

The solar tax imposed by the Czech Government basically means a decrease of the current FiT that was supposed to be guaranteed to investors for 20 years by the Government. The proceeds from the taxes are to be used to reduce the increase in household and industrial electricity prices over the next three years.

The Czech Photovoltaic Industrial Association (CZEPHO) and a group of PV investors have taken great pains during the past 2 months to lobby in the Senate against the solar tax. They managed to obtain a special legal appraisal proving that the solar tax constituted a considerable violation of the Czech Constitution.

Good Outlook

The Supreme Court of the Czech Republic will have to assess the senators´ complaint against the solar tax. This process is likely to take several months. However, the odds are high that the Supreme Court will reject the solar tax legislation on the grounds that it substantially interferes with the legitimate expectations of solar power plant operators in the Czech Republic as well as with other provisions of the Czech Constitution.

Considerable Losses

Investors in solar power are likely to lose over several million euros before the solar tax is cancelled. Based on the available estimates, the incurred losses of the investors amounted to well over 10 million euros in the period from January to February 2011 - and this is why investors will continue their litigations and arbitrations against the Government of the Czech Republic.

New Legislative Battle

It seems that the battle against the solar tax will be successful. However, representatives of the Czech PV industry are concerned about new “solar legislation” they will have to cope with. The reason for this is that Czech officials have been working hard on new “solar legislation” which may affect solar investments in the country in the near future.

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