Flanders introduces further cuts to solar subsidies

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Flemish minister for energy Freya Van den Bossche has reformed green energy support. The government intends to overhaul its renewables certificates' scheme, where renewable energy producers receive a certificate for every megawatt generated, alongside phasing out subsidies.

Van den Bossche announced that support for existing installations would not be affected. However, the government believes solar energy in particular is currently being over-subsidized and in need of adjustments to bring it in line with its current market value. Every renewable technology is expected to receive a specific number of certificates in order to gain the right form of support. Van den Bossche hopes a more stable market value will offer investors more confidence in the industry. Support will furthermore be limited to a cancellation period of an installation which, depending on the technology, will be ten to fifteen years.

Finally, suppliers who include unfair margins will be fined. Green power support is currently financed primarily by households and small enterprises, but as from 2013 it will be more evenly distributed, charging enterprises a more substantial share of the cost. At present about 2,200 energy-intensive businesses that use above 1GW and depend on their energy bill to remain competitive, can partially escape their share of the charge if they can prove their efforts to become more energy-efficient in future.

Only in March did we report that market analysts believe Belgium to be a profitable investment for solar manufacturers and consumers alike. An annual growth of 737MW of solar capacity and high residential growth rates of Q2 2011 allayed fears brought on by the July 1 digression of green certificates and abolishment of tax reductions.

Therefore it is not surprising that Flemish industry association PV Flanders is up in arms claiming that these adjustments were not expected for another six months and held without consulting industry experts. The association states that confidence in the industry began to wane since surprise cuts were announced in November last year.

“A stable and trustworthy policy is needed for the next few years to give the industry a boost so that funding in the future will be unnecessary,” said Alex Polfliet, chairman of PV-Flanders. “This cut to the financial support for PV comes as a shock: all the signals we received were of an informal adjustment on January 1, 2013 with no additional cut this year. We are in support of a gradual decline, but now the Flemish government has effectively pushed us down the stairs.” PV Flanders has warned that over 6,000 jobs in the PV sector could be at risk as a result of these cuts.

“We can only accept properly substantiated adjustments from January 1, 2013, following consultation with the sector,” says Daniel Herman, vice president of PV-Flanders. “We demand a constructive dialogue with the government to demonstrate that solar panels are essential in achieving the objective of green power generation with numerous economic benefits.”

Current installed capacity in Belgium is 2GW, accounting for an annual average of 4% of electricity generated pumped back into the grid.

With government targets for renewable energy increased from 13% to 20.5% by 2020, the industry does not expect this goal to be achievable without financial assistance from the government.

Experts had previously advised that solar power in Belgium would be able to compete against the price for traditional sources of electricity by 2017. Flanders' green power production currently stands at 7%.

Van den Bossche said, “We want to prevent electricity shortage in the near future, as has been suggested by supporters of nuclear energy. In the long term, an independent Flemish power supply based on green energy is the only viable option.”

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