Solar Thermal & Energy Market

An Expert's View about Environmental Technologies in the Czech Republic

Last updated: 8 May 2011

Summary
The Czech Republic has, by European standards, relatively good conditions for the use of solar energy. The overall amount of average sunshine is 1400 – 1800 hours/year (with some mountain areas and the South Bohemia region having more). The Czech Republic is one of the CEE leaders in installed cumulative solar capacity, mainly as a result of recent government incentives. In 2010, the country’s capacity grew by 1,953 MW, moving it to third place in installed output, behind Germany and Italy. The Czech Republic is fourth in Europe in total installed capacity of solar power plants.

Market Data
The Czech Republic owes its growth in the last couple of years to favorable feed-in-tariffs (FIT), the availability of cheaper technologies in the market, and a stronger currency. As a result, the government introduced restrictions in order to slow growth in the sector. Last year, the Czech government reacted to the huge boom in solar energy (and the Energy Regulation Office's warning that it could raise energy prices by over 10%), when the cabinet adopted a series of measures to reduce the increase in energy prices to 4.6 percent for households and 5.2 percent for companies, on average. Among the measures was a 26 percent tax on energy from solar power plants and higher fees for the use of farmland for building photovoltaic plants. A moratorium exists on all new PV grid connection applications. The government justifies the moratorium based on the extremely high valid grid connection.

The purchase price of electricity from solar power plants with output above 100 kW connected after January 2011 has been cut by over a half, from last year's CZK12,150 ($682) to CZK5,500 ($315) per MWh. Plants with a capacity of 30-100 kW will now receive CZK5,900 ($335).

Currently PV energy producers can choose between FIT and green bonus, which are both paid by the operator. FIT tariffs have been available in the Czech market since 2002. Green bonus is a more risky choice that can, however, also bring higher potential revenues.

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Posted: 06 May 2011, last updated 8 May 2011

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