The Czech PV market has long been identified as a prime example of the boom-bust cycles that have plagued the solar industry. Existing PV power plants may now face an extremely difficult 2016, as the electricity market regulator indicating that FIT payments may not occur without a confirmation of support from the European Commission (EC).
The Czech public media outlet reported today that Alena Vitaskova, the head of the Czech Energy Regulatory Office (ERU), might not authorize the payment of FITs to existing renewable energy power plants, including some 2 GW of solar PV, unless payments are approved by the EC. Vitaskova made the comments on Czech public television, adding that at present only around 7% of Czech renewable arrays have received EC approval for payment.
Without FIT payments, slightly over 2 GW of Czech utility scale PV would have to sell electricity on the wholesale market. Retail electricity prices currently stand at around 0.30/kWh. The majority of the Czech Republics PV arrays were installed between 2008 and 2011 and, as such, were installed at far higher prices than those of today.
In justifying the move, the ERUs Vitaskova cited overgenerous FITs for solar PV.
"The returnability [payback period] of some sources, such as some types of photovoltaic plants, is seven years, but we will be paying the support for 20 years," Vitaskova said.
Czech FITs for solar PV arrays larger than 30 kW, granted in 2010, are around 0.459/kWh. A tax on gross revenues from solar FITs of 26%, between 2011 and 2013, and 10%, as of 2014, is payable by solar park owners.
Industry and Trade Minister Jan Mladek, according to the Czech press agency, has disputed that the renewable sector including PV receives "excessive support," as this was addressed by the tax on FIT revenues previously put in place.
"To use this topic as a new reason for not paying out subsidies is an empty argument, by which the ERU chairwoman is trying to manipulate the public," Mladek said. He added that solution to the standoff is likely to be found.
"Government materials say clearly that not providing support to renewable sources is a step beyond legal limits," the Czech Photovoltaic Industry Association executive director Veronika Hamackova said. She said that tens of thousands of renewable energy projects may face bankruptcy is FIT payments are suspended.
This article was changed on December 7, to clarify average Czech retail electricity rates.