The Czech government plans to implement a new round of retroactive reductions in feed-in tariff subsidies for photovoltaic power generation from 2008 to 2010.
Jan Krčmář, executive director of the Czech Solární Asociace, said: “The government’s 2025 Czech state budget (which has not yet been adopted by parliament) currently does not have enough funds to cover the costs of renewable energy, especially solar power projects.”
He added that Czech Finance Minister Zbinek Stanjula has repeatedly proposed plans to cut feed-in tariffs for renewable energy power generation projects. Mainly affected are the 2 GW of solar and biomass power projects commissioned between 2006 and 2013, a significant portion of which are owned and operated by international investors. These cuts will have a profound impact on existing and ongoing investment in renewable energy.
Krčmář pointed out that the government has cut feed-in tariffs for solar power plants several times in the past.
Krčmář said that the solar industry faces a total of 13 regulatory measures, including the implementation of a 20% "solar tax". He noted that in 2021, Parliament increased this levy by an additional 10%. The decision was dubbed the "final chapter" at the time and came with a pledge that there would be no further cuts to subsidies.Solární Asociace said a recent analysis by the Czech Ministry of Industry and Trade showed that subsidy standards are in line with EU legislation. The average investment return rate (IRR) of Czech renewable energy power plants is less than or equal to 8.4%, and the average is about 6%.
Krčmář warned that the proposed cuts would have a negative impact on investors' ability to pay interest and lead to defaults.
"The minister claims that renewable energy investors have paid off their loans and recovered their investments," he said. “That is not the case – the Czech banking sector currently registers more than €1 billion ($1.1 billion) of outstanding loans.”
Over the past few years, foreign companies have invested heavily in developing new renewable energy projects. However, if the Czech Republic seriously damages investor confidence, investment projects will not be successfully completed and will be cancelled,” Krčmář said. “International arbitration and litigation are foreseeable. "
It is reported that the Czech Republic added 484 MW of new solar installed capacity in the first half of this year, which is basically the same as the 487 MW in the same period in 2023.
In addition, the Czech Energy Regulatory Office (ERÚ) released data that in the first half of this year, Czech power generation fell by 5.6% year-on-year to 36.1 TWh. Compared with last year, the electricity output of almost all traditional power generation methods has declined, while the output of photovoltaic power generation and wind power has increased, with photovoltaic power generation increasing by 28.4% year-on-year.
