Czech Republic

The feed-in tariff system came into force in the Czech Republic back in 2002 but wasn't initially very successful. This lack of interest in the scheme led to a RES Act that was adopted in 2005. This extended the feed-in system by offering the choice between a FiT or a Green Bonus, which is an amount paid on top of the market price.

The FiT system applies to electricity supplied and metered at the delivery point between the generating plant and the respective distribution system operators whereas the Green Bonus applies to electricity supplied and metered at the delivery point between the generating plant and the regional system operators and supplied by the generator to an electricity trader or eligible customer.

Producers will be given the choice to either sell electricity for purchase prices or offer it to trader for the "market-price" and simultaneously get extra green bonuses - paid by the operator of Transmission System.

The "Energy Regulatory Office" determines the FiT and the green bonus each year in advance. The prices may not be lower than 95% of the value of the year before. Prices are set on the following assumptions:

o Return on investment of 15 years
o Prices are differentiated according to the renewable energy source
o Prices are differentiated by the year of commissioning

The Czech Senate has now approved a new law, which will add a 26% tax on solar energy production over the next three years, as well as 32% tax on carbon credits awarded to solar companies in the next two years. The new taxes will apply to all photovoltaic plants that were guaranteed to receive a fixed FiT for a period of 20 years.

The solar production tax on revenue will not apply to solar plants placed on top of buildings with a capacity lower than 30kW. This solar tax will be retroactively applied to all ground-mounted PV built in 2009-2010 in the Czech Republic. Basically, it means a decrease of the purchase prices of solar energy under the FiT that were supposed to be guaranteed to investors for 20 years by the government. The proceeds from the taxes will be used to reduce the increase in household and industrial electricity prices next year.