Photovoltaics – What should you know before investing?
Today, you would be hard-pressed to find (not just a real estate) company whose management would not consider investing in solar panels in response to the extreme volatility in the energy markets. The benefits are obvious: You will save money by reducing the amount of electricity you use, you will reduce your carbon footprint, and above all you will increase energy self-sufficiency, which in light of current events seems almost a necessity.
Before tackling the technical side of the investment, join us for a look at some of the impacts and aspects you may not have known about:
- Licensing
When installing photovoltaics above 10 kWp and generating electricity for subsequent sale to consumers, a special license from the Energy Regulatory Office is required. 10 kWp today hardly corresponds to the output of a PV plant for a larger family house, but an amendment to the Energy Act raising this limit to 50kWp is currently in the legislative process. In addition, a person with professional competence is required to grant a licence for PV plants above 20 kWp. You will also be subject to other obligations with the licence (e.g., reporting of electricity production).
- Electricity tax
You also have to take into account the increase in tax administration. If you sell electricity to an end consumer (e.g., a tenant) or if the installed PV power exceeds 30 kW (even for self-consumption/delivery to the distribution system), you become liable (with specific exceptions) for electricity tax. This entails standard obligations such as registering for electricity tax with the local customs office and filing a return and paying the tax by the 25th day of the following month for which the tax is due. The tax currently amounts to CZK 28.30 per MWh generated and is normally a calculation item in the selling price of electricity (in case of sale).
- Sale of overflows
What are you to do with the electricity that you or your tenant do not manage to consume? Currently, a common solution is to hand over small overflows to the distribution network for free or sell them at a predetermined price to the company that buys the overflows. Some companies take into account the spot price of electricity when buying back, but this is not the rule. In this context, we would also like to draw attention to the forthcoming amendment to the Decree on the Electricity Market Rules; the proposal works with the possibility of community sharing of generated electricity, but for the time being it is only aimed at sharing within a residential building.
- Subsidies for acquisition
According to our market research, the acquisition costs start on average at EUR 30 thousand. CZK per installed kWp; if you add batteries, the price of the system starts at CZK 50 thousand per installed kWp. Currently, there are several subsidy programs running, under which it is possible to apply for subsidies for the purchase of PV plants by business entities (e.g., OPTAK, RES+, or NPO). OPTAK will provide 45% to 65% of the costs, while for RES+ and NPO you can get up to 35% of the eligible costs for solar panels and up to 50% for batteries. Obtaining the subsidy and the amount depends mainly on the size of the business, the method of implementation and the location of the implementation. The amount drawn or the implementation costs compensated are often capped. For some subsidy programmes (NPOs), the allocated resources have already been exhausted, so projects are placed in the so-called ‘stack’ and capacity increases are negotiated with the European Commission.
- Building permits
For PV installed on an existing building, the capacity of the installed PV is again a decisive factor for the building permit obligation; currently, the limit is set at 20 kWp. An amendment to the Building Act increasing this limit to 50 kWp is now being discussed in the same package as the amendment to the Energy Act. This should prospectively lead to a partial relief from bureaucracy also for larger business entities, not only for domestic PV plants.
