Interest-free solar loans: Half allocated, conditions simplified

The Interest-free FVE Loan programme gives Czech businesses access to more affordable investments in their own clean energy generation and energy storage equipment. Loans of up to 3 million crowns are available to companies of all sizes and include a grant component. In the first year of operation, half of the project’s allocated funds for the three-year period have been committed.

The Ministry of Industry and Trade (MPO) launched a new project in cooperation with the National Development Bank (NRB) in July last year to support energy self-sufficiency and the use of clean energy. The Interest-free FVE Loan programme, with an allocation of 3 billion Kč, runs until 2027.

Businesses can obtain loans of between 0.5 million and 3 million Kč, thereby reducing negative environmental impacts. The repayment period is set at 15 years, with the option to defer repayments for 3 years. In addition, businesses can receive a grant component as part of the loan. This covers 30 % of eligible expenditure for a photovoltaic power plant and up to 50 % of eligible expenditure for energy storage.

The loan finances the construction of a photovoltaic power plant on business premises with an installed capacity of 1 kWp to 50 kWp inclusive. The second option is the construction of a PV plant together with battery electricity storage systems. Storage is not a mandatory requirement, but the programme does not cover its standalone purchase. Eligible expenditure includes, in addition to the equipment itself, services provided by designers in preparing documentation, for example.

However, support under this programme is available only to entities that have not reached the €300,000 subsidy ceiling over the past three years under the de minimis support rules.

At the end of August, the NRB announced changes to the conditions, which may simplify the application process. Applicants for an interest-free loan no longer need to submit a building permit when expanding an existing PV plant with new panels, provided the installation’s total capacity does not exceed 100 kWp and the capacity of the newly supported part does not exceed 50 kWp.

Strongest interest from sole traders and small firms, with funding available within 4 weeks

The programme is intended for a broad range of businesses, from sole traders and small and medium-sized enterprises to large companies. In practice, according to the bank, applicants are predominantly sole traders and smaller businesses, particularly from the manufacturing and trade sectors.

Over 13 months, the NRB concluded more than one thousand contracts with applicants for preferential financing, and the committed funds now represent almost half of the allocated amount.

"Our intention is to ensure that the entire allocated amount is drawn down by the end of this year,"said Michal Nebeský, an NRB board member responsible for business management, in an MPO press release.

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The strongest interest in this type of support has been recorded mainly in the Hradec Králové and South Moravian regions. The process from submitting an application to drawing the funds can be relatively quick.

"If an applicant submits complete and correctly filled-in documentation, funds can be drawn within four weeks. However, to draw the funds, the applicant must also submit the documentation required under the Call, such as a grid connection protocol or an inspection report," said Milan Vodička, PR manager at the NRB.

Not all applications are successful, however. The NRB rejects around 30 % of applications, most often because the conditions are not met or because of the company’s unacceptable financial position. To reduce the error rate, the institution offers consultations. Its staff stay in contact with applicants and help them complete their applications. To inform applicants about how to prepare an application correctly, the NRB has established cooperation with the Solar Association. According to Michal Nebeský, this has significantly improved the accuracy and completeness of submitted applications.