Czech government to discuss a 20 billion crown increase in this year's renewable energy spending

The government will discuss today increasing spending on supported energy sources (POZE) by approximately 20 billion to a total of 28.57 billion crowns. The state is expected to use mainly money from budget reserves and unspent expenditure to cover the increase. Marek Vošahlík, a spokesperson for the Ministry of Industry and Trade (MPO), told ČTK today. Finance Minister Zbyněk Stanjura (ODS) will also support the MPO proposal. He said it would not increase the planned state budget deficit.

The state has been paying subsidies for POZE since 2006, disbursing a total of more than 538 billion Kč by 2023. Consumers have paid hundreds of billions more through their electricity bills; according to calculations by XTB analyst Jiří Tyleček, the figure was approximately 364 billion Kč excluding VAT.

„This is a proposal to increase funding to cover the expected costs of operating support for POZE in 2025 to 28.57 billion crowns, while also providing six billion crowns from the budget reserve. If approved, the funding will therefore come from the aforementioned reserve, funds already allocated and available to the MPO, and the ministry's unspent expenditure,“ Vošahlík said of the ministry's proposal.

Last autumn, the government decided to allocate 8.5 billion crowns from the state budget this year, the same amount as last year. However, under the existing rules, the Ministry of Industry and Trade had initially budgeted 31.2 billion crowns for 2025. The government had planned to reduce the state's costs for supporting renewable energy sources, for example by better assessing the profitability of their operation and tightening inspections.

It is now becoming clear, however, that the amount initially allocated for POZE will not be enough this year. The Ministry of Finance will also support the MPO proposal. According to Stanjura, this will not jeopardize the planned state budget deficit for this year. „The same applies every year. You plan expenditure, but some of it does not materialize. The amount is high, around 100 billion crowns every year. The same situation will arise in 2025. So yes, we will meet the budget deficit target planned for 2025,“ Stanjura said.

This year, the Chamber of Deputies approved an amendment to the Energy Act that, among other things, introduces new requirements for operators of domestic solar power plants. Solar power plants with a capacity of more than 30 kilowatts that were commissioned in 2009 and 2010 will now be subject to individual profitability reviews. Stanjura had expected the amendment to reduce expenditure.

„It is not true that we will fail to make any savings. We have passed a new law, and we believe it will undoubtedly save some money. The law was not aimed only at 2025; it was intended to run through 2030, and the savings may also become apparent in subsequent budgets,“ Stanjura said.

The amendment was criticized by representatives of the solar industry, who say it will jeopardize the further development of renewable energy sources in Czechia and undermine investor confidence. According to the Solar Association, some foreign investors are already preparing to sue the state in international arbitration over the change in conditions.