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28.07.2011 10:36Czech Law on Solar Tax May Face Constitutional Court Scrutiny
Czech lawmakers passed the law at the end of last year in an effort to curb a sudden surge in solar plant installations that threatened to raise electricity prices
© pchow98@flickr.com
A law in the Czech Republic imposing a 26 percent income tax on solar energy producers for three years through 2014 will face a scrutiny by the country’s top court.
The law, ruled unconstitutional by the Prague Municipal Court, will probably be examined by all of the Constitutional Court’s 15 judges, spokeswoman Jana Pelcova said today. She didn’t specify when a decision may be expected.
Czech lawmakers passed the law at the end of last year in an effort to curb a sudden surge in solar plant installations that threatened to raise electricity prices, Bloomberg reported. The municipal court pronounced the law unconstitutional on the grounds that it retroactively levies tax on the state-guaranteed tariff of EUR 450 per megawatt-hour for solar energy.
A group of Czech senators has filed a similar complaint at the constitutional court in March. The court hasn’t yet decided whether it will view the two complaints as a single case, Pelcova said.
In addition to imposing a retroactive tax on solar plants hooked to the grid in 2009 and 2010, the law also raised fees for plants built on agricultural land and slapped a 32 percent levy on carbon credits awarded to the companies, which reward environment-friendly technologies. The government aimed to raise 12 billion koruna ($714 million) through those measures.
“Investors’ calculations comparing the situation before and after the law show that doing business in this field no longer makes sense,” said Jakub Hajek, a lawyer representing a group of Czech and foreign solar energy investors which has publicly backed the complaints.
Solar capacity in the Czech Republic almost quadrupled to 1,820 megawatts last year as investors raced to connect their plants to the grid by the end of the year in order to qualify for incentives. Those who didn’t manage to get connected in time receive a lower price for their electricity.
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