Entering phase B
Last updated: December 5th, 2013
Greece ranks 5th worldwide with regard to per capita installed PV capacity. 4.5 billion € were invested in PV in Greece during the last 5 years. In 2014, PV is expected to cover 7% of electricity demand in Greece.
For a small country in an unprecedented financial crisis, this performance is indeed amazing. There is a very good reason for this: a brave support mechanism. Greece has been offering high feed-in-tariffs (FiTs) for PV since 2006. This has skyrocketed the market, especially during the period 2011-2013, and reached a cumulative installed PV capacity of 2.5 GWp in 2013.
However, this very mechanism has also overheated the market. High feed-in-tariffs and dramatic decreases of PV costs since 2011 have led to a boom that the Electricity Market cannot sustain anymore. The Electricity Market Operator cannot raise the necessary funds for compensating the 2.5 GWp of PV installed so far (hence there are delays in payments of the feed-in-tariffs).
As a result of cash flow problems of the Market Operator, the Greek authorities have taken drastic measures against existing and future PV installations, since August 2012:
- A temporary tax, ranging between 25% and 42%, has been imposed to all operating PV plants (residential systems excluded).
- Licensing process for new PV projects has been put on halt (residential systems excluded).
- Feed-in-tariffs (FiTs) for new PV plants have been reduced in 2013 to 125 €/ΜWh for residential systems (<10 kWp), 120 €/ΜWh for small commercial systems (<100 kWp) and 95 €/ΜWh for large systems (>100 kWp), with a further drastic digression planned for the years to come.
The average wholesale cost of electricity in Greece is ca.75 €/ΜWh, with the cost of gas plants exceeding 110 €/ΜWh. Obviously, a solar kWh compensated with the new FiTs currently costs less than a KWh generated by a gas-fuelled power plant, reducing, simultaneously, country’s CO2 emissions.
In October 2013, the Greek Parliament approved a new support scheme based on net-metering (in parallel with the existing feed-in-tariff scheme). Projects making use of the net-metering scheme will not be affected by the freeze of the licensing process.
- Immediate release of the licensing process for new PV projects, as projects compensated with the new low FiTs, not only have negligible effect on the RES account (which compensates electricity producers), but also contribute to the reduction of the total cost of electricity.
- Replacement of the annual digression of tariffs (now in place regardless of the market size) by a “corridor” mechanism following the German example.
- Additional incentives for PV projects similar to the rest of RES (e.g. wind projects qualify for 10-year tax-free operation).
- Revival of the Helios project, for the reduction of the country debt through income generated by large scale PV projects developed on public land.
- Reassessment of the country’s 2020 target (HELAPCO proposes 12 GW of solar and wind by 2020).