Greece amends retroactive FIT cuts; leaves solar PV sector divided

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The Greek Government submitted a draft bill to its members of parliament (MPs) last night, who will debate on it at the weekend and vote on Sunday. The bill includes amendments to initial measures introduced earlier this month, with the intent to keep the large number of households and farmers who have rooftop PV installed happy.

The amendments suggest a lower feed-in tariff (FIT) cut for many categories of solar PV, while households rooftop PV installed before 2011 would be totally excluded from the FIT cut.

As a general rule, the amended FIT cuts benefit mostly old systems. Thus, while PV systems installed in 2009 and 2010 are proposed to enjoy higher FITs than initially suggested earlier this month, FITs for arrays installed in 2012 and 2013 are often reduced even further.

For example, a PV park larger than 5 MW installed in the first quarter of 2010 was suggested in early March to receive a FIT cut down to €370/MWh, so long as the park has not received any other form of subsidy, e.g tax credits. According to last night's draft bill, the tariff will be increased to €390/MWh.

However, if the same park was installed in the first quarter of 2013, the initial proposals suggested a FIT cut down to €230/MWh. Last night's draft bill would cut this park's tariff even further, down to €190/MWh.

Earlier measures also asked solar PV energy producers to contribute 35% of their 2013 income to the Greek renewable energy systems (RES) fund, which currently faces a €700 million deficit gap. Last night's draft bill keeps the measure intact but diversifies the amount to be paid by the time of the installation, ranging from 34% to 40% of the 2013 income. Again, more recent installations face higher charges.

Solar PV sector divided

A lively debate followed the introduction of new retroactive measures by the Greek Government earlier this month.

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The Greek solar PV sector has failed to unite behind a common line of arguments, with each sub-group putting forward their own agendas. The Association of Rooftop Installations, for example, wants home installations to be excluded from the new measures. Equally, the association representating farmers who have built solar PV parks on their land argues that new measures should exclude farmers. The Hellenic Association of Photovoltaic Energy Producers' (SPEF), in contrast, argues such exclusions would be highly unfair and thus fiercely opposes them. Meanwhile, the Hellenic Association of Photovoltaic Companies (HELAPCO) has kept quiet regarding installations in residences and farms, but does fully support the re-opening of the PV market. SPEF, on the other hand, opposes the re-opening of the market.

Not surprisingly, the Hellenic Wind Energy Association (HWEA) has labeled the new measures nonsensical, calling today's new proposals “a shame”. HWEA believes the government hasn't published a respectful study to support the fairness and the effectiveness of the new retroactive measures. This is again a patchwork of policy, HWEA says, and has asked the energy ministry to publish the study upon which the new measures are based, as well as a list with all solar PV plants in the country. Nevertheless, HWEA notes, the FIT cuts for the wind sector are unreasonably high given that wind projects did not create the RES fund deficit.

Parliament to decide renewables future

Members of the Greek Parliament have openly criticised the new bill. 57 MPs of the shaky government coalition sent an open letter to the energy ministry asking the RES fund deficit to be plugged with money from the natural gas sector and the Public Power Corporation (PPC) company. Critics say this is impossible because both natural gas and the PPC companies will then increase their bills, transferring costs to the consumers.

On the contrary, analysts and the vast majority of the RES lobbying groups have repeatedly asked for the reconfiguring of the Greek energy market and the removal of market distortions that highly favor the natural gas sector and hinder renewables. But this, they say, requires institutional changes and not just passing the bill to them, which will most surely be forwarded to the consumers.

The government needs at least 151 MPs of its narrow 153 MPs parliamentarian majority to vote in favor of the new measures in order to pass the bill. However, politicians do not want to burn bridges with the approximately 40,000 Greek households and the 2,500 farmers who have installed PV on their houses and farms and consist of a large pool of votes, especially ahead of the European Union elections in May.

Meanwhile, everyone is wondering whether the ministry of energy is holding another card close to its chest. The minister has kept surprisingly quiet regarding the role of the banks in these new measures. Local press reports the minister has received letters from the biggest Greek banks saying they will accept the freezing of solar investors' loan payments for a few months until the situation is smoothed out. It is possible the minister keeps this as a joker card to calm the parliamentarians' spirits in the forthcoming debate and achieve a compromise, which nevertheless is going to decide the future of renewables sector in Greece.

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