Finland Considers Tax Changes To Boost Small-scale Renewable Energy Sector
Proposed changes to the tax regime may bring significant financial gains for small-scale renewable energy producers in Finland.
Small-scale renewable power producers, including households with rooftop solar photovoltaic systems, in Finland currently pay tax with respect to the installed capacity and irrespective of the annual power generated and consumed on-site.
As per the current tax regime, generators pay a constant tax based on the installed capacity even if there is no actual generation of electricity. The power generation, especially in case of solar power, is heavily dependent on resource availability which can be highly intermittent in a country like Finland. To correct this situation, the Finnish finance ministry has proposed to tax annual production instead of installed capacity.
According to the proposal, 400 MWh of electricity generated every year will be exempt from tax coverage. While the exempted power generation limit may change, these tax changes would likely result in significant increase in uptake of rooftop solar PV power systems among households.
As of 2013, Finland had an installed solar PV power generation capacity of 11.1 MW, with 11 MW in the off-grid sector. The government’s attempt to make small-scale solar power production more attractive proves that there remains significant untapped potential for the rooftop solar power market.
Recently, ABB set up a rooftop solar power system at its Helsinki-based factory. The 181 kW project is the largest rooftop solar power system in all Nordic countries. The project required an investment of about half a million euros and was partly funded by Ministry of Employment and the Economy.
Image credit: Pöllö | CC BY 3.0
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