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The Czech government is trying to retroactively reduce feed-in tariffs (FITs) granted for PV projects between 2006 and 2013. The local solar sector has criticized the move, claiming that it could incite panic among investors.
The Czech government is trying to introduce new retroactive cuts on FITs granted to PV installations between 2008 and 2010.
“The 2025 Czech state budget as passed by the government, but not yet parliament, currently does not include sufficient funds to cover the costs for renewable energy sources, most notably solar power plants,” Jan Krčmář, the executive director of the Czech Solar Association (Solární Asociace), told pv magazine. “Czech Finance Minister Zbyněk Stanjura repeatedly announced plans to cut feed-in tariffs for renewable energy power plants in Czechia. This mostly affects approximately 2 GW of solar power plants as well as biomass plants commissioned between 2006 and 2013. A large share of power plants are owned and operated by international investors. These planned cuts would have deep implications for existing, but also ongoing renewable energy investments.”
Krčmář noted that the government has already cut feed-in tariffs for solar power plants multiple times in the past.
Krčmář said the solar energy sector has faced a total of 13 regulatory measures, including the implementation of a 20% “solar levy.” He noted that in 2021, parliament increased this levy by an additional 10%. This decision was characterized at the time as the “final chapter,” with assurances that there would be no further subsidy cuts.
Solární Asociace said that a recent analysis by the Czech Ministry of Industry and Trade revealed that subsidy levels complied with EU legislation. The average investment rate of return (IRR) for renewable energy power plants in Czechia did not exceed 8.4%, with an average IRR around 6%
Krčmář warned that the proposed cuts negatively affected investors’ ability to cover interest payments and led to defaults.
“The minister claims that renewable energy investors have already paid off their loans and reclaimed their investments,” he said. “This is not true – the Czech banking sector currently registers outstanding loans of more than €1 billion ($1.10 billion).
Solární Asociace said that recent investments could be jeopardized if the proposed measure is implemented.
“Foreign companies have over the past years invested large sums in the development of new renewables projects. These projects would however not be built and commissioned if Czechia severely damages investor confidence and would have to be written off,” Krčmář said. “International arbitration and lawsuits are to be expected.”
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