Europe's PV associations pen open letter to EU challenging EEAG proposals

The European Photovoltaic Industry Association (EPIA), together with 27 PV industry associations operating throughout Europe, have written an open letter to European Commissioner Joaquin Almunia, expressing their collective concerns over proposals outlined in the Environmental and Energy State Aid Guidelines (EEAG).

The signatories of the letter fear that the proposals put forward would seriously hamper Europe’s PV industry, harming the sector’s cost-effective development and damaging goals to increase the continent’s supply of renewable energy by 2020.

The European Commission launched a public consultation in December last year on a new draft proposal for the EEAG, which sets out levels of state aid available for renewable energy projects. The guidelines have become important pieces of soft legislation for the EU’s environmental protection policy objectives, and determine the ability of Member States to design support measures for PV by identifying what types of state aid mechanisms are compatible with EU legislation.

However, the EPIA and other PV bodies are concerned by the updated EEAG proposals, challenging the distinction between so-called "deployed" and "less-deployed" technologies, which they feel will create barriers to new entrants to the PV industry.

The open letter also questions the requirement of different technologies to compete for state aid in a technology-neutral bidding process. Such a ruling, they argue, would unduly constrain Member States’ technology mixes and undermine their capability to hit the 2020 targets. Furthermore, these restrictions could hinder the development of promising renewable energy technologies that are some way down the learning curve.

An overall lack of flexibility in the support schemes was also criticized, as was the obligation for Member States to switch those mechanisms that have not proved effective. Such short-termism, argue the signatories, would create uncertainty for investors.

PV industry’s proposals

The open letter puts forward a series of revisals to be considered by the European Commission. The letter states: "We strongly believe that a cost-efficient development of renewables in Europe is possible if State Aid is granted on the basis of tailor-made, technology-specific support mechanisms."

The letter also urges that Member States should "remain capable of driving specific technologies down their learning curve, in line with the new energy lending criteria developed by the European Investment Bank (EIB). This will also ensure that several competitive technologies become available after 2020."

Finally, the letter proposes that State Aid in the form of FITs should remain eligible for small installations and cooperative-driven projects for all technologies below a 5 MW threshold, adding that "State Aid rules should only help reduce market distortions and not try to address issues already covered by other, more relevant pieces of European legislation," in a direct reference to grid stability concerns and cross-border cooperation already addressed by the Renewable Energy Directive.