A damning report by a Czech-based legal firm, written on behalf of the Czech Photovoltaics Industry Association, attacks the motives behind the Czech authorities move to tax solar projects. All plants built in the country since 2009 coupled to a current halt to new connections is seen as the worst retroactive move by any government. The report claims that CEZ has applied for a European Investment Bank loan with the real intention of acquiring more than 150MW of PV power plants as cheaply as possible.
The report, passed to PV-Tech, also raises serious doubts over the Czech Government and major utility, CEZ claims that electricity prices would soar due to the boom in PV installations. The report further attacks CEZ for planning to manipulate the 26% tax law on revenues that could lead project developers to sell their PV power plants at a significant discount to CEZ as many become financially impacted.
The potential for severe electricity price increases were dismissed as scaremongering by trade association on the grounds that:
Business tenders by some energy brokers for 2011 illustrate that the increase in additional costs to support renewable energy sources are offset by the dramatic two year decline of market prices for energy.
The report says that price rises were estimated based on over-stated figures for PV power plants connected to the network by the end of 2010, totalling 1600 MW installed but that a more realistic figure would be 1400MW.
Using what the report claims as ‘real-world input data’ an increase in electricity prices will not exceed the government-set limit of 5.5%, without having to introduce any further measures.
The report highlights that it believes the electricity distribution companies, due to incorrectly set regulations, had problems with cash flow. The increased electricity production from renewables resulted in more money being paid-out as part of the feed-in tariff at a time when cash was short.
Another reason cited for the termination of connections was the belief that renewable energy was in direct competition with fossil and nuclear energy producers. CEZ is claimed in the report to be viewed as a near monopoly and that the plans to build two new nuclear power plant units would ultimately need to have sufficiently secured sales of electricity to recoup the significant investments.
The report concludes by claiming:
The facts described show that the current government favours energy production with fossil and nuclear fuels, systematically creating administrative and economic barriers to the development of renewable energy sources.
It also prepares the way for the merger of electricity production from renewable resources into the hands of big energy companies. These trends are in fundamental conflict with the policy of the European Union in this field.