Big solar power companies may reconsider positions on Slovak market

(ADPnews) - Mar 4, 2011 - Leading solar power companies will probably reconsider their positions on the Slovak market as government subsidies will only shine on small rooftop installations from July 1.

By Hristina Stoyanova

Slovakia has not experienced a boom in solar power capacities as the neighbouring Czech Republic has, but its market enlivened last year when its Economy Ministry gave the green light to the construction of 33 solar farms with a total installed capacity of 109 MW.

The country’s solar energy potential is one of the highest in the European Union (EU) with an average annual solar irradiation of between 1,100 and 1,150 kWh per square metre, according to data of the photovoltaic geographical information system (PVGIS) of the European Commission's Joint Research Centre. Yet, by the end of 2007 the total installed PV capacity in Slovakia was merely 20 kW. This was primarily due to the fact that PV was not included in the Slovak energy policy.

However, last year Slovakia, a country of five million people, lured many investors with its favourable feed-in-tariffs (FITs), compensating each kWh of solar electricity with EUR 0.43 (USD 0.6).

In May 2010, another German company, Mage Solar GmbH, part of Mage Group, established a sales force in Slovakia. The company offers its complete product portfolio, including modules, mounting systems and branded inverters.

“In Slovakia, the climatic conditions for productive solar plants are very good. The annual solar irradiation per square meter is comparable to southern Germany. Because of this, it is possible to build profitable photovoltaic power plants,” Mage Solar said at that time, adding that the introduction of FITs in September 2009, guaranteed for 15 years, has increased the interest in solar energy.

German renewable projects developer Juwi realized a 4 MW solar park in Slovakia. The facility will produce about 4.2 million kWh annually with 18,144 crystalline modules produced by Canadian Solar Inc (NASDAQ:CSIQ).

However, at the end of 2010, the Slovak Parliament passed a law in a bid to curb a hike in electricity prices and prevent a surge in solar power installations that can put a risk to the country’s transmission system.

The amended act limits support only to facilities with an installed output not exceeding 100 kW that are placed on roofs or walls of buildings registered in the land register. Furthernore, the Slovak regulator was allowed to reduce the FITs by more than the existing 10% adjustment.

According to the new law, there will be no FITs for ground-mounted systems from July 1, 2011. Now, a company can implement a ground-mounted solar park, only if the building permit was granted before February 1, 2011 and if the ground-mounted solar system is connected to the grid before June 30, 2011.

“That's why we have to re-evaluate the situation in Slovakia right now,” German photovoltaic system integrator Phoenix Solar AG (ETR:PS4) told ADPnews in a statement last week.

Attracted by the favourable FITs, last year Phoenix Solar completed the construction of a 2.2 MW facility located around 80 kilometres (49.71 miles) away from the capital Bratislava. The power plant was commissioned in November.

“The Slovak market will concentrate on roof-top systems up to 100 kWp in future,” the company said, adding that for Phoenix Solar it is not a defined core market. The company will concentrate on the international business with Germany, USA, France, Italy, Spain and Greece being its core markets. On a project basis it is also looking at Bulgaria and the UK.

Slovakia should lift the share of renewable energy to 14% of its overall energy consumption by 2020 in line with EU goals. The country, which joined the EU in 2004, covered 6.4% of its power consumption from renewable sources in 2005.

(EUR 1.0 = USD 1.397)

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