In a retroactive move judged by investment commentators tohave the effect of 'breaking the confidence of potential investors' the Czech Senate has confirmed the adoption by the Czech parliament on 9 November of an amendment on the retroactive impact of revenues from PV systems. With immediate effect, PV plants that were guaranteed to receive a fixed feed-in-tariff for a period of 20 years will have to pay a tax on the revenues generated -
The amendment will have the effect that in the next three years, PV plants larger than 30 kWp set up in 2009 and 2010 will have to pay a tax of 26% on the revenues generated.
The photovoltaic sector in the shape of the EPIA has severely condemned this decision:in a press release it stated that retroactivity changes the conditions guaranteed to the operators of solar power plants already on the grid in 2009 and 2010. Current law guarantees them a FIT already set for these years. A special tax of 26% retroactively reduces that guaranteed FIT, it substantially interferes with the legitimate expectations of operators of solar power plants. One may therefore expect a number of litigations and arbitrations against the Czech Republic government
Commenting on the decision, EPIA (European Photovoltaic Industry Association) secretary general (ad interim) Eleni Despotou said “The photovoltaic sector unanimously condemns the measure; investors have based their confidence on the stability that the FIT scheme brings since it is guaranteed by the law. Thisdecision will clearly break their trust in the renewable technology as areliable investment and inthe reliability of Czech republic as a safe placefor investment”.
On 10 November 2010, the European Commission issued a communication (COM(2010/639)) in which it recalled its opposition to retroactive changes to support schemes given the negative effect such changes have on investors' confidence. “The Czech decision largely compromises its capacity to reach the mandatory target set by the RES Directive. Today we are calling on to the European Commission, currently evaluating the way Member States are implementing the RES Directive to ask the Czech government and any other EU government with similar intentions to reconsider their decision” concluded Eleni Despotou.
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