The Czech Republic could face legal claims totaling nearly CZK40 billion (US$2.4 billion) if investors follow through with threats to challenge the country’s recently-passed solar tax, reports financial newspaper Hospodarske Noviny.
According to Finance Ministry adviser Radek Snabl, claims of CZK25 billion (US$1.5 billion) have already been lodged in opposition to the controversial legislation, which places a retroactive 26% tax on solar power profits at the end of 2010, and this could rise by a further CZK14 billion should investors also seek damages for a three-year windfall tax on solar power earnings.
The tax was introduced in an attempt to curb the rapid solar installation boom that was inspired by the Czech Government’s generous feed-in tariffs; in 2010 the land-locked central European nation installed 1.33GW. But by undermining its burgeoning PV industry, Václav Klaus’ Government has left itself open to arbitration damages of up to CZK250 billion (US$15 billion).
To date, German company Voltaic Network, Luxembourg-based Radiance Energy, Cyprus’ G.I.H.G and domestic solar giant Energy 21 have announced their intention to launch arbitration proceedings against the Czech state.