Czech Republic in violation of EU directives in order to stop solar boom

May 26, 2010 - Emma Hughes - PV-tech.org

On May 18 2010, leading Czech photovoltaic experts addressed the European Commission with a request to review a brand-new decree of the Ministry of Industry and Trade (MIT) of the Czech Republic regulating the construction of new solar photovoltaic power plants in the country.  Based on this decree, all PV plants installed in the Czech Republic from June onward that have a total output of more than 30kWp will have to adhere to very strict requirements related to using PV modules containing only solar cells with very high conversion efficiencies, namely 22% for monocrystalline cells and 16% for polycrystalline or thin-film cells.

Jaromir Rehak, chairman of the Czech Photovoltaic Industry Association (CZEPHO), pointed out that the new decree issued by MIT would result in a termination of a further development of the new photovoltaic sector in the Czech Republic for at least next ten years.  The new decree requests an application of the solar technologies that are best suited for usage in desert areas (like Nevada or midland Spain) but they will not work well in the conditions of the Czech Republic, where there is a shortage of direct sunshine.

New decree to be soon issued despite EPIA statement

According to a statement from the European Photovoltaics Industry Association (EPIA)establishing a mandatory minimum efficiency requirements for photovoltaic modules would be unique in the EU. In addition to that, photovoltaic energy relies on an inexhaustible source of energy - the sun- thus setting a minimum efficiency level is not relevant to assess its environmental impact. If adopted, such legislation would most probably result in putting an end to the PV market and industry development in the Czech Republic.

Good news for SunPower, bad news for First Solar

At present there is only one producer of currently commercially available modules containing mono-crystalline solar cells with the efficiency over 22% - U.S.-based corporation SunPower.  The new decree would imply that SunPower would become a monopoly supplier of solar modules for the Czech market from July 2010. The other producers of solar modules not keeping such strict efficiency requirements would not be allowed to supply their products to the Czech Republic.

The new decree would mean a "total stop" for the application of thin-film modules within big solar installations in the Czech Republic. With a maximum efficiency on the level of 12% these modules are not in a compliance with the new decree. Apparently, all world producers of thin-film modules will be damaged by the new decree. However, the biggest impact will be related to First Solar whose high-quality thin-film modules are often used in construction of big solar parks in the Czech Republic.

Violation of EU directives and Czech regulations

This type of rigorous conversion requirement has no parallel in the entire EU and is in a violation with several international regulations. According to an analysis conducted by the legal office Glatzova & Co. (details  to be found in Czech) the new decree is discriminatory and is breaching both Czech regulations and regulations of the EU. Apparently, the new decree restricts an import of solar modules into the Czech Republic.

Assuming that the new decree becomes effective July 1, it will have a fundamental impact on PV plant investments planned by many domestic and foreign investors in the Czech Republic. Unless these investors have valid construction permits (issued before July 1), they will be obliged to follow the guidelines set forth in the new decree.

Should the Czech Republic adopt the new decree (without any future amendments), then it will likely be severely fined by the European Commission.  Moreover, the odds are high that severed investors that prepare their investments into the solar parks will sue the Czech Republic at the respective international courts and ask for billions of Czech crowns as damages.

What will happen next?

Apparently, Czech government wants to temper solar investment boom in the country, which is overheated. According to research carried out by a solar server (www.solarninovinky.cz) it can be expected that in 2010 there will be 1400-1500 MW of newly PV installed capacity. However, the "solar bonanza" has ignited fears of a spike in energy prices and grid instability.

From well-informed sources there are signals of another restrictions being soon implemented in the Czech Republic. The rumours are going around the new tariffs for solar energy will be cut by 50% in 2011. In addition to that a very strict cap (like in Spain) for new PV installations may be established in the country as well.

Author background

Jaroslav Dorda started his career as a power trader with CzechpolEnergy s.r.o./Cinergy Corp. in 1999. After spending six years trading power at German/Czech markets, he founded a private company focusing on consultancy in the field of cost optimalization/reduction of electricity purchases for big final consumers of power in the Czech Republic. Since 2008 the author is engaged in photovoltaics - he is an owner of a small rooftop PV plant. In February 2010 he founded a specialized website - www.SolarniNovinky.cz which is dedicated to a development of photovoltaics both in the Czech&Slovak Republics.