- This year’s RES auctions have been announced
- The regulation specifying the reference prices for this year’s RES auctions
- New requirements for photovoltaic installations
- Increased popularity of photovoltaics in Poland due to domestic programs
- Letter of intent signed with the photovoltaic industry
- Thermo-modernization relief in PIT
1. This year’s RES auctions have been announced
From November 3 to December 3, 2020, auctions will be held this year. There will be exactly 8 auctions for the sale of electricity generated in RES installations.
The baskets for this year are presented below:
Source: Announcement of the President of the Energy Regulatory Office No. 45/2020 on the auction schedule for the sale of electricity generated in renewable energy installations planned to be carried out in the year 2020
As the schedule shows, the last two auctions (comprising both wind onshore and PV) should be followed when it comes to PV farms. Every year they are the most popular.
As for the news, due to the COVID-19 pandemic, the auctions will only be held electronically on the Online Auction Platform. It was also noted that the prices presented in the regulation are net amounts, excluding VAT.
2. The regulation specifying the reference prices for this year’s RES auctions
On May 19th, the Regulation of the Minister of Climate of April 24, 2020 on the reference price of electricity from renewable energy sources in 2020 and the periods applicable to producers who won auctions in 2020 entered into force.
This regulation specifies the maximum prices in PLN per 1 MWh for which energy can be sold by generators through an auction organized in 2020, the so-called reference prices.
The President of the Energy Regulatory Office (ERO) indicated that the energy sold at the auction held a year ago was cheaper than the legislator assumed. Therefore, in this regulation, the reference rates have been set at a lower level, and in terms of photovoltaics, in both cases less by PLN 25 per MWh:
- with a total installed electrical capacity of no more than 1 MW, using only solar radiation energy to generate electricity, is PLN 360 / MWh;
- with a total installed electrical capacity of more than 1 MW, using only solar radiation energy to generate electricity, is 340 PLN / MWh;
The President of the ERO mentioned that the main beneficiaries of the auction system in the past years were entities using solar and wind energy onshore to generate electricity.
3. New requirements for photovoltaic installations
As of September 19 this year, the construction law was amended once again.
Photovoltaic panels generating power in the range from 6.5kW to 50kW are treated in accordance with Art. 29 as building sites and construction works that do not require a building permit. So they are usually quite small installations, most often found on the roofs of houses and they do not require a special permit. However, when the installation exceeds 50kW, then such a building permit must be obtained.
Nevertheless, even in these small house installations, some formalities will be necessary. It is assumed as obligatory:
- to agree with an expert on fire protection in terms of compliance with the requirements of fire protection;
- to report the completion of the construction of photovoltaic devices, regardless of the place of their installation, to the authorities of the State Fire Service competent for the location of a given facility.
The regulations, however, do not specify what the expert is to verify. Notification of construction completion to firefighters may in the future facilitate access to a faulty installation.
One thing is certain – the overall cost of such an installation will increase due to the expert fee and the installation completion time will be longer.
4. Increased popularity of photovoltaics in Poland due to domestic programs
According to the research, as many as 75% of Poles benefited from state aid when installing a photovoltaic installation. Poland is a country that still has to catch up with the EU percentage threshold of RES energy consumption in relation to the total consumption. The 2020 target is 20% and production is around 13% of renewable energy at the present time. In order to encourage small investors, the state offers some concessions and subsidies. These include:
- “My electricity” is a non-returnable subsidy granted by the state for each new venture up to a maximum of PLN 5,000. This is a real incentive for people who generate electricity for their own needs (prosumers) up to 10kW. The money allocated to this program should be enough for 200,000 installations, which is, according to the current trend, by the end of the year.
- Thermomodernization relief – it is a tax relief in PIT which allows the owner of a single-family house to deduct up to PLN 53,000 for all installations in total. The exact set of expenses can be found in the ordinance of the Minister of Investments and Development of December 21, 2018, but as a rule, these are gross amounts from invoices (unless VAT has been deducted previously) of purchased goods used to install panels. The deduction can be combined with the “My Electricity” program.
These are two very popular and effective tools to encourage investment that Poles associate with saving. The study shows that taxpayers who decide to invest in photovoltaics are largely aware of the aid offered by the state.
5. Letter of intent signed with the photovoltaic industry
The Ministry of Climate has signed a letter of intent with organizations in the photovoltaic industry. All major institutes and associations came to a common understanding. And the goal is right because renewable energy is undoubtedly the future.
The co-sponsors of the “project” undertook to draw up a schedule of work on the agreement, to establish subsequent meetings in order to work out the provisions. In addition, it is assumed that participants in the initiative will share guidance on the implementation of cell production technologies, etc. Everything is to be covered by a final report on the photovoltaic industry.
The letter of intent is a prelude to further talks and the creation of a sectoral agreement that will be involved in the construction of the Polish photovoltaic value chain.
The directory of entities is open and the ministry encourages joining and cooperation.
This is another step towards building a sectoral agreement, and it is said to be the first such agreement in the European Union between the solar industry and the government.
6. Thermo-modernization relief in PIT
On May 8, 2020, the Director of the National Tax Information issued an individual ruling on the income tax from natural persons in the scope of the possibility of using the thermo-modernization relief.
The application describes the following facts: in 2019, the owners of a single-family house started its thermal modernization, fully financed by their own finances. The windows were replaced, the walls and the roof were insulated. Applicants have invoices documenting purchases for all construction material for adhesives, primers, paints necessary for modernization. In an amended form, it was added that the spouses are the owners of the house and that it is their joint property. However, they settle their income using the tax scale.
According to this state of affairs, the question was asked: can the invoice for the following construction materials be deducted from the income: window sills, materials used for installing the insulation layer (i. e. assembly pegs, adhesives, foams for polystyrene), finishing materials applied to the layer of insulation materials (i. e. thermal insulation paper, facade mesh, mesh adhesive, facade primer, exterior plaster, exterior paint)?
The applicant assumed that this was allowed and can do so. The Director of KIS also agreed, confirming the position. It was explained that the deduction is due not only to the materials included in the Regulation of the Minister of Investment and Development of December 21, 2018 on the list of types of building materials, devices and services related to the implementation of thermal modernization projects.
What is very important in the case of thermo-modernization relief, this relief is available only to the owner of the house, and the relief can be used up to 3 years after the investment is completed.
Interpretation reference: 0112-KDIL2-1.4011.248.2020.2.DJ