An EU Law Change Could Render Home Solar Panels Worthless

European governments have tried various schemes over the past decade to incentivize the installation of home solar panels. Some countries, like the Netherlands, have offered feed-in tariffs – special rates for these consumers to feed electricity into the grid when they don’t need it.

Most governments have treated these small installations differently from big generators, to make it more economically interesting for individuals and communities to install solar panels. Without these special conditions, solar panels could end up costing people more than if they bought their electricity from the grid.

But such incentives could disappear or be severely curtailed under a change in EU law that would treat big utilities and small-scale generators the same. The renewable energy industry is warning that this would pull the rug out from under consumers who have invested in solar panels, and it would discourage potential new installations if they are suddenly subject to lower payments for feeding into the grid, or having to fulfill the same bureaucratic requirements as a large energy utility.

“People would just say, ‘forget it’,” says James Watson, CEO of the Brussels-based industry association SolarPower Europe.

Equal access

The European Commission, the EU’s executive branch, has proposed that as part of a reform of the EU’s electricity market design rules to take effect after 2020, national governments should be required to give equal access to all energy providers and end the practice of regulating prices, leaving the rates paid for feeding energy into the grid to market forces. It would place new obligations on energy generators.

The Commission included an exemption to such “balancing responsibility” requirements for solar installations that have a generation capacity of less than 500 megawats, in order to protect the investments made in home and community solar installations.

However Krišjānis Karins, the center-right Latvian member of parliament who is in charge of the file, is sceptical of these exemptions. An avid free marketeer, he has pushed against these exemptionz for small installations, saying Europe’s energy market needs to be free of state intervention.