While growth is forecast to follow the same trajectory in the first six months of 2013, the report predicts a decline in the second half of the year. This slowdown will become more apparent in 2014, it says, when licensed projects are not concluded, due to the current financing difficulties and the recently imposed levy on photovoltaic parks.
Despite the Greek economy’s problems in the last three years, the country has established a relatively impressive photovoltaic project landscape. According to data published last week by LAGIE, the Greek electricity market operator, 890 MW of new photovoltaic capacity was installed in 2012, thus taking cumulative capacity to 1.424 GW. In terms of energy production, the report finds that Greece generated 1,231.5 GWh of solar last year, which amounts to almost 80% more than in the years 2009 to 2011.
Meanwhile, the Hellenic Association of Photovoltaic Companies (HELAPCO) states that the industry employs about 20,000 workers, with half of the direct jobs located in the design and installation of PV systems, and the other half in the supply-marketing equipment and services sector.
The association has requested an increase in Greeces 2020 national PV installation target to 6 GW, up from 2.2 GW.
Recent policy developments
The success of the Greek market stems from a rich FIT program that offered investors high returns in a country where sunshine lasts long hours. Unfortunately, however, the tariffs were significantly cut last August and the Government stopped receiving both new PV installation applications and processing pending ones, although roof installations and the so-called "fast track" projects were excluded from the measures.
Furthermore, the Government imposed in November a levy on photovoltaic installations leveling 25 to 30% of their annual turnover (the levy excludes roof installations and projects which were granted building permission with the reduced FITs valid from August onwards). The levy was imposed retroactively from July 2012, and extends to June 2014. The Government further has the right to lengthen it for an additional year.
The Greek Ministry of Environment, Energy and Climate Change (YPEKA) says the reason for the previous measures is the enormous deficit in the Special Renewable Energies Fund of the Greek electricity market operator, LAGIE.
LAGIE uses the fund to pay solar power producers. However, Mr. Papageorgiou, YPEKA’s Deputy Minister, says the fund had a deficit of 370 million before the measures, which created long delays in the payment system and, most worryingly, showed an upward trend. The levy money, Papageorgiou added, will go to eliminate this deficit.
Another reason for the implementation of the recent measures, Papageorgiou claims, was the "high" installation figures. Further to the 1.424 totaling 2.978 GW of contracted ground-mounted projects much beyond the 2.2 GW target the Greek Government set for the year 2020, based on the European Union directives.
YPEKA’s arguments have met fierce opposition from various photovoltaic market actors who claim that LAGIE’s fund deficit is the result of long-term distortions and miscalculations on the Greek wholesale electricity market.
The role of the banks
The Hellenic Association of Photovoltaic Energy Producers (SPEF) has recently taken action on both a domestic and European level against the imposed levy, and is now concerned about its members business viability.
The levy, SPEF warns, has seriously affected PV producers’ initial business plans, with many now said to be struggling to meet their financial requirements. Thus, SPEF has asked Greek banks to ease the situation by firstly reducing interest rates on loans granted and secondly extending the duration of loan repayments.
It has additionally asked the Greek Government to step forward and press the banks towards that direction.
At a recent meeting of SPEF with officials of Pireus Bank in Athens, both parties stressed that LAGIE’s fund deficit is fundamental to the financial problems of the PV producers.
LAGIE has not paid PV producers since July. This, together with the levy burden, has pushed many producers to their limits. Both Pireus Bank officials and SPEF agreed that it is necessary for the Greek Government to set up a regular and reliable LAGIE payment plan that restores liquidity in the market, and then the bank can consider further actions.
SPEF has also recently met with high officials of other Greek banks, including the Eurobank and the National Bank of Greece, and is going to continue its meetings and discussions in order to find a common solution.
Edited by Becky Beetz.