Russia may impose huge fines against leading solar developers

The Russian government may impose huge fines against leading developers of solar power due to delays in the commissioning of new solar power plants in the country.

According to a spokesman of the Russian Ministry of Industry and Trade, investors who received high tariffs for the building of solar plants in Russia were not able to commission even a single solar power plant in the country in 2014.

The Russian government had initially planned for three new solar power plants with a total capacity of 35.2 MW — which accounted for 4% of the total solar power capacity to be added between 2014 and 2018) — to be commissioned by December. Due to localization issues and difficulties in securing necessary bank loans, the launches have yet to take place.

Companies taking part in Russia’s solar energy tenders must ensure that they use locally made equipment at the level of no less than 50% in 2015 and at least 70% from 2016 to 2018.

Energiya Solntsa, one of Russia’s leading solar power developers, was to commission two 15 MW PV plants. Failure to do so may now result in major fines for the company. At the same time, Russian solar company Evrosibenergo was supposed to launch another plant with a capacity of 5 MW in the Khakassia Republic but likewise missed the date.

According to current Russian legislation, the delay will result in penalties for the companies in the amount of 25% of the price of the power of the plant. That means that the annual fine may reach US$7-10 million.

An Evrosibenergo spokesman said the company plans to launch the planned plant this year.

In the case of Energiya Solntsa, while the company’s total portfolio of planned solar power projects is estimated at 435 MW, it has so far only launched a pilot solar station with the capacity of 250 kW in the Astrakhan region. According to the company, difficulties in meeting Russia’s localization requirements are behind the delay.

So far, only two leading solar power developers in Russia have been able to solve the problems of localization: Hevel, which is part of the Renova Group, built a solar panel manufacturing plant in Chuvashia, while China’s Solar Systems have begun to build a similar production line in Tatarstan.