Solar investors plan to file suit against ČR

Prague, Feb 13 (CTK) - The association of unsuccessful investors in photovoltaic power plants SNIFE is preparing to file a suit against the Czech Republic over Kc5.5bn owing to failed investment in photovoltaic power plants, SNIFE chairman Vladimir Cibulka has told CTK.

Purchasing prices of electricity fell sharply as of the beginning of 2011, which forced the entrepreneurs to cancel photovoltaic projects whose connection to the grid they requested two years earlier, Cibulka said.

By introducing high purchasing prices, the state tried to make investors build solar power plants so as to meet the goals of the European Union's directive on the share of renewable sources on electricity production, according to Cibulka.

Entrepreneurs who are now associated in SNIFE had invested in the preparations of the projects, but had to cancel the projects after the purchasing price of electricity was cut from Kc12,150 per megawatt hour to Kc5,500 and investment in solar power plants no longer guaranteed a return, Cibulka said.

"The biggest tragedy is that we have met the requirement of the state to invest in renewable sources," Cibulka said.

A number of entrepreneurs have lost their life's savings owing to cancellations of the projects, he noted.

SNIFE wants to turn to Czech courts with their complaint. It also complained at the European Commission. The association says the Czech Republic has not met some provisions of the directive that sets the goals for increasing the share of renewable sources on the total energy production.

Cibulka admitted that the fast development of large solar parks in 2010 led to high expenditures of the state budget.

"Politicians knew this, but did not react to the situation and did not try to resolve the growing problem," Cibulka said.

"The consequences of a sharp drop in prices then affected small investors who did not have a chance to back out of projects in time because the change was too fast and without transitional periods. We could not prepare for the situation because the long-term development of purchasing prices did not indicate any such thing," he said.

SNIFE associates 27 entrepreneurs who mostly planned to build smaller photovoltaic power plants. The power plants they planned were to have a total installed output of 55 megawatts. The installed output of the largest solar parks in the Czech Republic exceeds 30 megawatts.

The state decided to cut radically the purchasing price of photovoltaic electricity produced in new sources following a solar boom in 2010. Large investors' interest in the construction of new sources decreased following the step. Most newly installed solar panels are now on the roofs of buildings.

However, the state continues to pay high support to solar power plants installed earlier. This is, according to the Energy Regulatory Office (ERU), one of the main reasons why electricity prices for end customers are growing.

This year, customers' contribution to renewable sources, paid in the price of electricity, is Kc583 per megawatt hour compared with last year's Kc419.