Bulgarian Constitutional Court hands down victory to solar industry

Share

Bulgaria’s Constitutional Court last week repealed a 20% fee that the government had imposed on the income of solar PV and wind energy producers in January.

PV and wind producers will not be charged the fee as of August 10 following the court’s decision, handed down on July 31. The ruling has no retroactive effect, therefore solar PV and wind power producers will not be refunded the fee payments collected since January and which, according to the Bulgarian Photovoltaic Association (BPVA), amount to about €50 million ($67 million).

BPVA’s Desislava Lesova told pv magazine that the association firmly believed "the unconstitutionally gathered €50 million should be given directly as aid to energy poor families and not be used as a buffer in the budget, as initially planned by the minister of finance."

The industry was also disappointed by the Constitutional Court decision not to revoke the other part of the law passed in January that applies limitations in the hours of solar PV and wind power generation for which feed-in tariffs (FITs) are paid.

Specifically, apart from the 20% fee, the amendment to the Renewable Energy Sources Act that entered into force in January also provided a cap on the hours of generation from PV and wind plants for which FITs are paid on an annual basis. In real terms this means solar PV and wind plants are remunerated a FIT for only a number of hours that are subject to a cap.

The repeal of the 20% fee has been accepted with relief by the country’s solar PV investors who have seen their income reduced massively in the past year.

A series of adverse government actions towards the PV sector — including the now revoked 20% fee, the limitation in the hours of solar PV generation eligible for FITs, power curtailments decided by the Electricity Market Operator discriminatorily against solar PV plants, and a permanent grid access fee applicable since March 13 — has financially exhausted renewable energy investors and brought the market to a freeze.

Not surprisingly, the newly installed PV capacity in the first half of 2014 amounts to a shockingly low 1.18 MW figure, according to information provided by the Sustainable Energy Development Agency. In 2013, solar PV installations only reached 10 MW, which is in stark contrast with the 843 MW installed in 2012.

Lesova pointed out to pv magazine that the constitutional case was opened at the request of Bulgarian President Rosen Plevneliev in January. Plevneliev had immediately opposed the amendment of the law in January and referred the case to the country’s Constitutional Court requesting it to be declared unconstitutional.

A complete review of the Bulgarian solar PV market was published in the June issue of pv magazine along with a comparison of the neighbouring yet very different Romanian PV sector.