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Czechs Cut Solar Feed-In Tariffs By 5 Percent For 2010

Date: 26-Nov-09
Country: CZECH REPUBLIC
Author: Michael Kahn

PRAGUE - The Czech energy regulator has cut feed-in tariffs for solar-generated power by 5 percent from the beginning of 2010, the country's energy regulator announced on Wednesday.

Generators who produce solar energy sold to any of the country's three main power distributors will receive 12,250 Czech crowns ($709.3) per megawatt hour, down from 12,890 crowns per MWH in 2009, according to the Energy Regulatory Office.

The new tariffs also include a so-called "green bonus" of 11,280 crowns per MWH for solar power sold to traders or other customers, down from a current price of 11,910 crowns per MWH, the office said.

Tariffs are the solar industry's lifeblood as long as the so-called grid parity -- the point at which renewables cost the same as fossil fuel-based power -- has not been reached.

Investors are on the lookout for new opportunities in central and southeastern Europe after Spain and Germany, the global industry leaders in photovoltaics (PV) that turn sunlight into energy, have either cut or plan to curtail incentives.

The Czech Republic has so far attracted the lion's share of investment in eastern Europe due to generous subsidies but investors are worried Prague may reduce the feed-in tariffs even further.

Generous tariffs in Spain caused a bubble and Madrid slashed subsidies and introduced caps on qualifying plants in 2008, which hit the worldwide PV industry that had come to rely on the Spanish market. [ID:nLB182330]

The lack of fixed prices has kept the installed solar capacity at just 1.4 MW in 2008 compared with 54 MW in the Czech Republic out of a total of 63 MW in eastern Europe, data from the network of photovoltaics in new EU member states showed.

The Czech capacity could reach 200 MW this year as investors rush to connect solar parks to the grid before the government's likely decision to limit tariffs for new parks, they say.

(Editing by James Jukwey)

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