Czech lower house cuts support for new PV plants

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Czech lawmakers are seeking to control a solar energy boom, which has triggered fears of a steep rise in electricity prices and future power grid instability.

The new law, which still requires clearance in the parliament’s upper house, limits support only to those newly built PV plants on buildings, not on land, and only to those whose capacity does not exceed 30 kW.

Existing plants built by March 2011 will reportedly keep operating under the current favorable conditions.

It scraps the subsidies altogether for "island" power plants built in 2011 that are not connected to the national grid.

"If we didn’t do anything (…) it would drive up the electricity prices for households by 20 percent and for industry by 23.5 percent," Industry and Trade Minister Martin Kocourek told the lower house. "This would be devastating for competitiveness of Czech industry."

The new law is part of wider measures that the Czech government plans to curb the PV boom and limit electricity price growth to 5.5 percent next year.

They also include abolishing five-year tax holidays for solar plant operators as well as imposing 26 percent solar power tax and a tax for power producers on carbon dioxide credits for 2011 and 2012. That tax will be around 30 percent, Kocourek told Reuters, and will mainly hit majority-state owned power group CEZ.

The parliament has already approved a law giving regulators higher flexibility in modifying the feed-in tariffs to react to changing prices of solar panels and other cost factors.

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