Denmark allocates $16.5 million in incentives for solar up to 1 MW

Denmark’s Ministry of Energy, Utilities and Climate has announced that it will launch a new incentive scheme for PV projects not exceeding 1 MW in size.

The new scheme will have a budget of 105 million DKK ($16.5 million) and will be capped at 35 MW in 2017. Selected projects are entitled to receive a tariff ranging from 0.66 DKK ($0.10) per kWh to 0.77 DKK ($0.12) per kWh, the ministry said.

The Danish government stressed that, compared to the previous incentive scheme for commercial and industrial PV, the current scheme has increased the capped annual capacity from 20 MW to 35 MW, and the size of the projects up to 1 MW.

The scheme will now have to be approved by the relevant EU authorities.

In December 2016, Denmark’s Minister for Energy, Utilities and Climate, Lars Chr. Lillehol decided to close the second phase of the incentive scheme for solar (the so-called ‘transitional model’) after revealing that there were 1,660 MW of PV projects under the scheme that were unapproved due to budget issues.

In December 2016, the Danish Parliament also approved the government's decision to gradually abolish during the period 2017-22 the Public Service Obligations (PSO) levy, which finances the country’s renewable energy incentives program. Starting from 2023, eventual incentives for renewables, which are currently being financed by power consumers, should be paid with the state budget.

Last week, however, the Danish government allowed PV to compete on the same subsidy tender auctions as onshore wind. The new measures will impose a limit on total subsidies offered to renewables between 2018 and 2019 of 1 billion Danish krona, which is $158 million.

Denmark’s cumulative installed PV capacity reached 854.8 MW as of March 3, 2017, according to the latest statistics from Danish energy operator Energinet.dk.