Investors threaten to take action after the Czech Parliament cuts solar industry aid

On Wednesday, the lower house of the Czech parliament approved a change in rules for aids to solar power plants that could reduce some support. Industry representatives criticized this decision and said it violated commitments made by government.

The bill still requires approval from the upper house. It will require power plants that were built between 2009 and 2010 - when profits soared - to provide annual profit calculations. These calculations will be used to determine if they are eligible for state assistance.

The calculation is also extended to include the entire lifetime of an installation, not just the period during which the state supports it.

The lawmakers did not accept some of the most controversial proposals. These included a reduction in the return on investment allowed for solar plants or an end to aid payments made when excess production drives market prices below zero.

The government has stated that it must limit state aid in order to stabilize the budget.

Representatives of the industry said that the bill is damaging.

Jan Krcmar of the Solar Association, the industry's trade group, said that it was absurd for the government to try to fill budget holes by breaking its commitments to investors and Czech and European laws.

He claimed that the state was at risk of causing "an unprecedented shock" for banks which finance solar project and that three investors from abroad, whom he declined to name, planned an appeal.

(source: Reuters)