February cuts to subsidies temporarily weakened demand for new solar PV systems. But people are even more bothered by the fact that they can feed only half of their surplus electricity back into the grid.
These changes have discouraged households with low consumption from buying solar PV systems. However, installation companies assure customers that solar power plants are still worthwhile for households, as their acquisition cost is up to one hundred thousand crowns lower than a year ago and electricity prices are unlikely to fall much further.
Anyone who does not combine solar PV with insulation upgrades will receive 40 thousand crowns less from the New Green Savings programme. It has become apparent that this cut in subsidies, effective from mid-February, has also reduced interest in purchasing solar PV. Demand for new solar power plants fell by as much as half in March, one month after the reduction.
The same fluctuation has been confirmed by Innogy. “Demand was unusually high in February and fell in March. This was due to a change, or rather a slight reduction, in subsidies for residential solar PV systems. After the solar PV boom caused by the sharp rise in electricity prices, this business too has moved to the usual fight for every customer,” notes Marek Bako, solar PV product manager at Innogy. All the companies contacted agree that the decline in interest in residential systems was only temporary and that, based on the long-term average, interest is growing over time.
Schlieger also speaks of a temporary reduction in interest, especially during February. “The primary reason was concern about changes to the conditions of the subsidy programme. Demand levelled out in March, and in April we are back to last year’s figures,” says Károly Attila Juhász, marketing director at Schlieger. However, the companies contacted agree that the decline in interest was only short-term and is now rather increasing.
E.ON also recorded a short-term slowdown in demand after the change in subsidy conditions, which reduced state support by 40 thousand crowns. “However, the subsidy reduction occurred for logical reasons, as the price of solar PV has fallen by up to one hundred thousand crowns in some cases over twelve months due to lower component prices and a reduced VAT rate. Even with the lower subsidy, solar PV therefore costs significantly less than it did at the start of 2023,” points out Ondřej Hájek, head of the household energy solutions department at E.ON. According to him, however, the decline in electricity prices has very likely reached its maximum and prices will not fall any further.
“We certainly expect that even those interested parties who had been waiting because of falling electricity prices will start considering solar PV. We therefore expect demand to pick up again and believe we will maintain this stable level in the years ahead,” Hájek says. In his view, energy prices may rise again, mainly due to the move away from coal-fired power plants and higher costs of operating the distribution grid.
David Krásenský of Columbus Energy, which also installs solar PV systems, adds that while wholesale electricity prices have fallen in recent months, distribution charges are increasing. “On the other hand, the prices of solar PV components and installations remain lower. While two years ago people made their decisions partly out of concern about electricity prices or shortages, today they are deciding more rationally and with the lifetime of solar PV in mind, a horizon of 25 to 30 years. Even with current subsidies and energy prices, the return on investment remains very attractive,” Krásenský believes.
At the same time, it is becoming apparent that people are even more bothered than by the 40 thousand crown subsidy cut by another change effective from February: a cap on selling surplus electricity to the grid at 50 percent of a solar power plant’s capacity.
“Before this new limit was introduced, solar PV was also installed by people with low consumption who had suitable roofs, both in terms of size and orientation. They expected that feeding electricity into the grid would provide them with extra income, shorten the investment payback period and then give them free electricity for part of the year,” explains Acetex’s Milota. Under the new rules, however, people lose half of this benefit.
However, according to the companies, the falling value of hardware compared with last year should be an incentive to acquire solar PV. “The purchase price is roughly one hundred thousand crowns lower than at this time last year. Solar PV is therefore worthwhile even after the change in subsidy conditions that took place in mid-February. Our calculations show that the payback period for such systems is in some cases shorter than it was at this time last year, precisely thanks to falling hardware prices and the VAT reduction on construction work, which a fair supplier will reflect in its pricing,” Hájek says.
Schlieger is also highlighting the same attraction. Its solar power plant prices are likewise at a historic low. “This means that the end customer can now buy solar PV from us more cheaply than a year ago, and with higher-quality, more modern components,” Károly Attila Juhász assures. Last year, it offered a basic 3.85 kWp solar PV system for 214 thousand crowns. The price of this configuration is now 37 thousand crowns lower. The move of solar PV into a lower VAT rate has also reportedly contributed to the reduction.
Petr Maule, executive director of the Czech Photovoltaic Association, says that interest in solar PV has not weakened even after the subsidy reduction. “But, exactly in line with economic rules, the sectors in which solar PV has begun to grow enormously are changing. Today, industry and commercial companies, which were previously at the margins of interest, are becoming the biggest drivers of solar PV for installation firms. It is clear that energy prices will not return to their previous level, and industry is therefore now seeking to become partly energy-independent,” Maule explains.
According to him, housing associations (SVJ) and energy communities are becoming another driver. “Solar energy is still waiting for its main growth there, but it is already recording record increases of tens of percent,” Maule observes.
S-Power Energies also confirms that interest from apartment buildings has been growing significantly since last year. This is thanks to an amendment to an Energy Regulatory Office decree that opened up new sharing options. “Residents of apartment buildings can now use green energy not only in common areas, but also in individual flats. Moreover, it is no longer necessary for all residents of a building to agree on acquiring a power plant — removing another major obstacle,” Jaroslav Šuvarský explains.
A recent development in solar PV is also installations on the roofs of municipal buildings — such as schools, municipal offices, sports halls or wastewater treatment plants. LEX OZE II, an amendment to the Energy Act that will allow community electricity sharing this year, opens up interesting opportunities for them within communities.
In the future, municipalities may therefore achieve substantial energy savings through sharing and gain greater energy independence, according to Šuvarský. Another major advantage, he says, is generously structured subsidy financing, which can cover up to 75 percent of investment costs for smaller municipalities with up to three thousand inhabitants.
Republished from the online portal EkoNews.cz, a website about business and sustainability.
This article is a machine translation of the Czech original and has not yet been fully reviewed. In case of any doubt, please refer to the Czech version.
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