LEGAL AND ADMINISTRATIVE BARRIERS
IN THE INVESTMENT PROCESS OF PHOTOVOLTAIC
SYSTEMS IN POLAND
Recommendations on How to Remove Barriers
to the Development of Photovoltaics on the national level
Polskie Towarzystwo Fotowoltaiki
(Polish Society for Photovoltaics)
September 2011
Information:
This document was drawn up in connection with the PV LEGAL Project — The Reduction of Legal and
Administrative Barriers to PV System Installations in Europe (contract no. IEE/08/591/SI2.529234) with the support
of the European Commission within Framework Programme for Competitiveness and Innovation ―Intelligent Energy
for Europe‖. PV LEGAL is a project of national photovoltaic industry associations designed to improve framework
conditions for the development of photovoltaics in Europe.
Author:
Dr. Stanisław M. Pietruszko
Polskie Towarzystwo Fotowoltaiki
Ul. Prałatowska 5 lok. 50, 03-510 Warszawa
Tel. +48-605099781, Tel./fax: +48-22-6798870
E-mail: [email protected]; www.pv-polska.pl
Consultancy:
eclareon GmbH
Luisenstr. 41
10117 Berlin
[email protected]
1
Legal advice :
Weronika Pelc
Partner
Wardyński i Wspólnicy sp.k.
Al. Ujazdowskie 10
00-478 Warszawa
www.wardynski.com.pl
The PV LEGAL Project is supported by:
Legal notice of the European Commission
The author takes full responsibility for the content of this publication which does not necessarily reflect the opinion of the
European Community. The European Commission is not responsible for any use of the information which this document contains.
The author’s legal notice
The contents of this document have been compiled with extra care and full attention. The author does not give a guarantee
concerning the choice, correctness, completeness or quality of the information which has been shared. The author shall not be
held responsible for any damages, either material or immaterial in nature, which result from the fact that the provided information
was or was not used, as long as the author is not proved to have acted with evil intent or gross negligence.
No part of the present publication shall be reproduced, saved in any systems or circulated without the prior permission of the
Author.
1
In the scope of established rules of law and statutory legal obligations imposed on investors. Evaluating operation of
administration offices, accuracy of legal solutions, possibility of meeting the specified demands, etc. are derived from the
Author's views.
2/32
TABLE OF CONTENTS
1
SUMMARY
4
2
INTRODUCTION
8
3
THE IMPACT OF LEGAL AND ADMINISTRATIVE BARRIERS TO PV DEVELOPMENT IN POLAND
4
THE ANALYSIS OF BARRIERS CAUSED BY ADMINISTRATIVE AND LEGAL PROCEDURES
12
CONCERNING THE INSTALLATION OF PHOTOVOLTAIC SYSTEMS AND RECOMMENDATIONS
FOR REMOVING THESE BARRIERS
4.1
4.2
Barrier 1: Lack of appropriate support mechanism for the development
of photovoltaic market
14
Barrier 2: Legal and administrative procedures, social-security contributions
14
4.2.1
The analysis of / reason for the barrier
15
4.2.2
Suggestions for overcoming the barrier
16
4.3
4.4
Barrier 3: Specifying the conditions for the connection to the grid, connecting a PV system
to the grid, commissioning and authorizing to operate.
17
Barrier 4: Local Land development plans
17
4.4.1
4.5
The analysis of / reason for the barrier
Barrier 5: Obtaining a licence for generating electrical energy
17
17
4.5.1
The analysis of / reason for the barrier
17
4.5.2
Suggestions for overcoming the barrier
18
4.6
Barrier 6: The installation of PV systems
4.6.1
4.7
The analysis of / reason for the barrier
18
18
Barrier 7: Obtaining certificates of origin, the so-called green certificates
and activity involved
5
14
18
4.7.1
The analysis of / reason for the barrier
18
4.7.2
Suggestions for overcoming the barrier
19
SUMMARY OF LEGAL AND ADMINISTRATIVE FRAMEWORK FOR PHOTOVOLTAICS
IN POLAND
20
ACKNOWLEDGEMENTS
22
ANNEX I: METHODOLOGY OF RESEARCH
23
ANNEX II: DESIGNING AND INSTALLING PHOTOVOLTAIC SYSTEMS IN POLAND
24
ACKNOWLEDGEMENTS
I express my heartfelt gratitude to all the people mentioned below for cooperation, professionalism and commitment.
Realization of this project would not be possible without the help I received from them. I would also like to thank
them for the time spent on the project, sharing their knowledge, important advice and observations that have
significantly contributed to the creation of this document, so important for the development of PV in Poland.
Mr. Andrzej Dominiewski
Ms. Weronika Pelc of Wardynski & Partners,
Dr Zdzisław Muras of the Energy Regulatory Office,
Mr. Piotr Dukat of RWE STOEN,
Mr. Jacek Ochmański of the Bureau of Architecture and Spatial Planning of Warsaw Municipality,
Mr. Robert Brückmann and Ms. Anna Poblocka of Berlin‘s consultancy company eclareon
Members of the Polish Society fpr Photovoltaics
My co-workers at Warsaw University of Technology — Mr. Witold Granicki, Mr. Kamil Kulma, Ms. Katarzyna Ciupak,
people from companies installing photovoltaic systems,
Ms. Dagmara Bołtrukiewicz and Ms. Alicja Sobocińska.
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1
SUMMARY
In the present document Polish Society for Photovoltaics analyses legal and administrative barriers that stand in the
way of the development of photovoltaics in Poland. At the same time, the paper contains suggestions of how the
barriers may be overcome. The suggestions about changes are based on the results of the research in connection
2
with the PV LEGAL Project from Framework Programme for Competitiveness and Innovation (CIP) of the European
Union, which is aimed at removing bureaucratic barriers in Europe. The present document examines the
requirements of the investment process for photovoltaic systems at every stage of construction, such as the
selection of the investment site or commissioning and the sale of the electricity in three segments of the market:
A — small PV systems on residential buildings (up to 30 kW),
3
B — small and medium-sized systems (30-150 kW ) installed on rooftops of industrial and commercial buildings,
C — big ground-mounted systems over 150 kW.
The potential of photovoltaics (PV) in Poland is highly underestimated by policy makers and the general public alike.
4
Currently, an installed PV capacity is estimated to be 1.75 MWp . These installations, however, are not usually
connected to the grid (mostly powering road signs). According to the Energy Regulatory Office (Urząd Regulacji
Energetyki — URE) until 30 June 2011 licences for the production and sale of electricity have been issued to
5
systems with total power of MW . URE also issued a licence promise for MW. Consequently, the assumption in
6
―Polish Energy Policy until 2030‖ that by 2020 the nominal capacity of PV installations in Poland will have reached
2 MW is incorrect. Pursuing such an aim means stagnation in the development of PV in Poland.
The development of all renewable energy sources (RES) in Poland is based on support of such schemes as,
certificates of origin for energy produced in RES (green certificates), the obligation to purchase the total amount of
energy originating from RES, soft loans, exemption from excise duty on produced power, the reduction of tax rate
and non-returnable grants. There are no such modern financial tools as feed-in tariffs, which have been introduced
in most EU countries and represent the strongest incentive to invest in RES since they are a long-term guarantee of
profitability of investments.
But even if there are good mechanisms for support and general regulations, the key issue concerns low-level legal
and administrative barriers that may effectively discourage investors from developing photovoltaics as a source of
electricity. On the level of national legal and administrative regulations there are seemingly beneficial solutions
concerning the obligation to show preference to RES system, while connecting to the grid, as well as distribution and
transmission of produced energy. However, the necessity of obtaining a licence for the production and sale of
electricity and some direct consequences (i. e. the obligation to start a business and to pay ZUS contributions), lead
to a situation in which the investment process in the case of small PV systems is utterly uneconomical. The
connection process is time-consuming, difficult and expensive due to unclear legislation and frequently because of
the way in which the regulations are interpreted by administrative organs and the grid operators. Furthermore, there
are the same procedures for PV systems with capacity of a few kW, as well as a few MW.
The document presents and analyses the most important legal and administrative barriers that stand in the way of
the development of photovoltaics in Poland. Chapter 3 describes a general influence of the identified barriers on the
process of carrying out the investment. Chapter 4 describes and thoroughly analyses particular barriers. It also
includes specific recommendations on how these barriers may be reduced. They are listed below in order of
negative influence on the development of photovoltaics in Poland.
2
3
4
5
6
―The Reduction of Legal and Administrative Barriers to PV System Installations in Europe‖ (PV LEGAL). The PV LEGAL
Project is financed by the European Commission in the context of the programme ―Intelligent Energy Europe‖. More
information about the project can be found at http://www.pvlegal.eu.
Nominal capacity in Standard Test Conditions (STC) (1000 W/m2, 25°C, spectrum AM1,5).
According to CIP IEE PV-NMS-NET Project research. More information can be found on the Project website at
http://www.pv-nms.net.
http://www.ure.gov.pl/uremapoze/mapa.html.
The document accepted by the Council of Ministers, Resolution No. 202/2009 of 10 November 2009 on the Polish Energy
Policy until 2030
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Barrier 1: The lack of appropriate support system for the development of photovoltaics
Only through the existence of an appropriate support system, allowing efficient allocation of resources which support
the development of new technologies concerning renewable energy sources, it is possible to create a market of a
substantial size. Unfortunately, the system of green certificates that is currently in force in Poland, is not such a
system. It only refers to the amount of produced energy regardless of its source and the size of the installation.
Moreover, the system of green certificates is already obsolete. In Europe it is in force only in 5 countries: Poland,
Romania (where, however, one obtains 4 green certificates for photovoltaic energy), Sweden and Great Britain (but
from 1 April 2010 the systems under 5 MW can use FIT) and some parts of Belgium. The other 21 European Union
countries, except Ireland, use feed-in tariff. It is impossible to think of a truly common use of renewable energy
sources while maintaining the current system considering the level of its complexity and costs. In practice, the
system cannot be used by the owners of small PV systems on detached houses, which have the capacity of a few
kW.
Barrier 2: Legal and administrative procedures concerning the necessity of running a business
This barrier primarily relates to small, but also medium-sized photovoltaic systems. To obtain a licence for the
production of electricity from RES, it is necessary to start a business (or to extend the profile of a firm which already
exists). When a natural person registers a business, they have to follow the standard procedure of setting up a
business in the Community Office. However, provisions concerning the necessity to pay social contributions make
such an investment utterly uneconomical, even it does not require any cost.
Barrier 3: Specifying conditions for the connection to the grid, connecting a PV system to the grid,
commissioning and authorizing to operate
The entity applying for the connection to the grid has to submit an application for specifying the conditions for the
7
connection to the power supplier that transmits and distributes electricity. The application contains an extract from a
local land development plan or a zoning decision. After one obtains the conditions, the entity to be connected and
the power supplier have two years to sign a contract of connection to the grid — then the conditions for the
connection terminate. The contract is the basis of starting any design, construction and assembly procedures,
according to its terms. Moreover, it also regulates the issues concerning the costs of the connection to the grid which
the parties shall cover. The basic difficulty is the preparation of technical documentation which should be attached to
the application for specifying conditions for the connection (which is required in accordance with the Regulation on
detailed conditions for the operation of the electrical power system of the power system and Transmission grid
operation manual). At present operators of the system do not have any experience linked to the connection of PV
sources. As a result, the process of preparing the conditions for the connection is lengthened
Despite the legal obligation to connect RES installations to the grid, operators that transmit and distribute electricity
transfer the costs of the connection to the investor (with respect to utility rates and Energy Law). Each distribution
system operator has its own instructions for traffic and use of the distribution grid, according to which partial and final
tests as well as commissioning are carried out. There is no universal instruction throughout the whole country which
would standardize the commissioning of PV systems. In consequence, every investor has to prepare for the
requirements of the local operator. Lack of uniform national requirements allows local operators to impose technical
conditions for grid connection which are difficult to meet. This increases installation costs and delays the date of
commissioning.
Barrier 4: Local land development plan
8
9
Legal rules concerning Area-planning and Area Management and Construction Law precisely define the functions
to be fulfilled by buildings on the area of a local land development plan. It means that there cannot be any production
activity in the areas designated for residential or commercial buildings. An investor who wishes to connect his PV
installation to the grid and to sell the produced electricity can be regarded as a ‗producer‘ and according to the law
7
8
9
Energy Law, art. 7, para. 3a and the following (Journal of Laws of 2006, No. 89, item 625 with later amendments); later
referred to as Energy Law
The Area-planning and Area Management Act of 27 March 2003 (Journal of Laws of 2003, No. 80, item 717 with later
amendments ) later referred to as LSDP
Construction Law of 7 July 1994 (Journal of Laws of 2010, No. 243, item 1623 with later amendments) later referred to as
Construction Law
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his installation cannot be mounted on a residential or commercial building, but only on a building which has been
considered to have the functions of the area for production purposes in the local land development plan. According
to Construction Law building permit is not required for works which consists in assembling solar collectors and only
building notification is required for the installation of devices higher than 3 m on building structures — it is still a
vague rule.
What is more, there are local land development plans for only about 30% of the Polish territory. The lack of such
plans means that an investor who intends to install a PV system on his grounds while the local authorities require
building permit, needs to go through a number of extra, cumbersome procedures associated with providing
documents and especially with obtaining a decision concerning building conditions (unless the issue is not
10
possible ).
Construction Law should take into account a peculiarity of PV systems. First and foremost, small installations, up to
30 kW, should not be treated as production activity. Furthermore, it should be allowed to mount them on buildings
located on the area intended for residential and commercial buildings according to the local land development plan.
Barrier 5: Obtaining a licence for generating electricity from RES
Obtaining a licence for generating electricity is a prerequisite for obtaining certificates of origin and generating
11
electricity from RES , regardless of the capacity of the installation. A licence is issued only after the actual
construction of the system has been completed.
12
In addition, a licence is issued only to businesses . The procedure is time-consuming and in the case of natural
person it is required to set up a business. The electricity production licence only entitles one to receive certificates of
origin as the business activity in the field of electricity production from RES is licensed and cannot be legally carried
out without a licence.
In this way, the system of licensing becomes an onerous administrative procedure which extends the investment
process. The solution to this problem is to exempt the producers of electricity in PV installations with the capacity of
up to 30 kW from the obligation to obtain licences for generating electricity.
Barrier 6: The installation of PV systems
Complex system of obtaining building permits, unclear regulations specifying whether the system requires such a
permit and problems resulting from inadequate content of the local land development plan extend the whole process
of investment and bureaucratic procedures discourage from investing in photovoltaics. During construction works all
procedures, building standards and safety regulations defined by Construction Law have to be observed. In the case
of systems which require building permits a building log should also be kept and a construction manager should be
hired. As a result, the construction of a PV installation may be subject to the same rigours as the construction of a
large architectural unit, which in turn increases the costs and extends the period of completing the investment.
The law is vague and it does not mention directly PV systems or solar collectors. Therefore, it is not clear if it is
enough to notify the authorities or if it is necessary to obtain a building permit. At the beginning on the level of
planning an investor does not know what range of bureaucratic procedures and associated costs should be taken
into account in the calculation.
PV installations of up to 30 kW mounted on the roofs of residential and commercial buildings and free-standing PV
installations with the capacity not exceeding 150 kW should not require a building permit and a building notification
should suffice.
Barrier 7: Obtaining certificates of origin, the so-called green certificates and activity involved
13
To obtain a green certificate, it is necessary to open a single account on the Polish Power Exchange (Towarowa
Giełda Energii — TGE) which is intended for collecting certificates of origin. This involves completing an application
10
11
12
13
Art. 61 of the LSDP
Art. 32 in connection with art. 9e para. 3 and art. 3 Item 12 of Energy Law
Art. 49, para. 1 of the Law on Freedom of Economic Activity of 2 July 2004 (Journal of Laws of 2010, No. 220, item 1447 with
later amendments), later referred to as the Law on Freedom of Economic Activity
Art. 9e, para. 7 of Energy Law and art. 50b, para. 1 in connection with art. 9 para. 3 Item 4 of the Law on Commodity
Exchanges of 26 October 2000 (consolidated version Journal of Laws of 2010, No. 48, item 284 with later amendments)
6/32
and numerous attachments. The licence entitles only to obtain certificates of origin and to obtain them it is necessary
14
to follow additional procedures related to applying for the issue of the certificate of origin to the President of URE
and then by registering the certificate with the registration account maintained by TGE. First a producer of PV energy
needs to use time-consuming bureaucratic procedures and then collect additional documents for each billing period
in order to become a beneficiary of such a support system.
The system of green certificates should be replaced by feed-in tariffs. However, if the system is maintained in the
present form, a producer of PV energy should receive specific multiplicity of the certificate and should be able to
apply for the certificates solely on the basis of their own annually verified statement defining the amount of produced
energy. The barriers and results are presented in a table of recommendations in chapter 5. These recommendations
are mostly intended for policy makers at the national level that take part in designing legal conditions for the use of
photovoltaics (PV). In this way, numerous recommendations were passed on to Sejm RP (a part of the Polish
Parliament), Ministry of Economy, Ministry of Agriculture and Rural Development, Ministry of Environment and the
Energy Regulatory Office. Furthermore, proposals have been prepared for DGO and TGO.
Annex I describes briefly the methodology of research.
Annex II is particularly important since it presents administrative requirements for the investment process of small
and medium-sized photovoltaic systems. It is the first time this type of document prepared by Polish Society for
Photovoltaics has been published in Poland.
14
Art. 9e, para. 3 of Energy Law
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2
INTRODUCTION
Nowadays there has been the change in priorities as far as energy is concerned. New technologies, which are
cleaner, faster to install and better adapted to local needs, arouse the interest of investors and local authorities and
start to compete with monopolised and centralised energy industry. If we compare different energy options more
frequently the costs are no longer a decisive criterion — more often the factors which are important have economic
value which is difficult to precisely calculate, such as energy independence, diversification of energy sources or the
continuity of delivery. It is particularly important with a view to the possibility of next energy crises.
Solar electricity (photovoltaics — PV) is considered to be one of the most promising and environmentally-friendly
sources of energy. It is exceptional among new sources because it is related to many possibilities for achieving
energy-related and other benefits. Photovoltaics has a few advantages. Decentralisation is one of them: electrical
solar energy is generated near the consumer and the amount which is available is not limited, PV systems are easy
to
install
and
operate.
Generating
electrical
solar
energy
is
practically
unsurpassed
and takes place at the time of the day when there is the greatest consumer demand so that the highest demand for
electricity is supplied. These advantages allow access to cheap, stable source of energy which considerably
influences energy supply and can be easily integrated with the whole energy system.
Considering its enormous potential resulting from direct conversion of commonplace solar radiation into electrical
power, solar energy might become a serious alternative to fossil fuels in future. It is an effective way of providing
―clean‖ energy in industrialised countries and of supplying electrical energy to developing countries without concern
for the safety of delivery and environmental pollution. In consequence photovoltaics fits perfectly in energy and
ecology schemes or projects on international, domestic, regional or local level. Priority issues in European R&D
plans for coming years involve not only the development of the market, but also research linked to the use of
renewable energy sources and especially photovoltaics.
Presently the prices of photovoltaic systems make solar energy competitive in relation to the costs of energy in the
period of peak demand and in the systems operating in a separate grid, hybrid electrical energy supply systems.
However, solar energy cannot yet effectively compete with cheap energy generated with fossil fuels. That is why it is
vital to develop the market through effective support mechanisms and research making it possible to drastically
reduce the costs of PV systems and improve their capability to convert solar radiation energy to electrical energy.
A rapid development of the PV market in various European countries is unavoidable to achieve the aims related to
the energy and climate package. The package presents the decisions of European leaders to increase renewable
energy share in energy mix to 20% by 2020. Poland aims at gaining 15%. Unfortunately, photovoltaics does not play
any significant role in Polish energy policy, in contrast to the situation in Germany and other European countries.
The full capacity of PV systems installed globally was 39 600 MW in 2010, which allow for generating about 50 TWh
of electrical energy annually. Despite economic crisis the amount of capacity in installed PV systems increased by
132% in 2010 compared with 2009. According to different forecasts the figure will have totalled between 912 and
1864 by 2030. By contrast, according to ―Polish Energy Policy until 2030‖ the capacity which is suggested for Poland
totals only 0.032 GW.
The global increase in 2010 is mainly caused by the development of German market, which nearly doubled within a
year — from 3.8 GW in 2009 to 7.4 GW of the power installed in 2010, which resulted in the total capacity of 17.3
GW, which was 47% of the global PV market. In 2010 German photovoltaic systems generated 12.3 TWh of
electrical energy (3% of total electrical energy production and a 3.5% share in the German renewable energy
market). The expected rate of increase until 2020 will make this figure almost ten times higher, up to 39.5 TWh.
According to the plans of German government 52 GW will be installed in 2020, which shows that photovoltaics,
along with wind power, is the part of renewable energy industry which is developing the most quickly.
In Germany photovoltaics will satisfy 7% of the general demand for electrical energy in 2020. At the same time
nuclear power will amount to only 1% of consumed energy (fig. 1). It does not support the thesis that nuclear power
is assumed to be the only alternative for energy industry considering the production of electrical energy without
CO2.emissions. Moreover, such dynamics of the development of RES will cause considerable reduction in the use of
fossil fuels, such as hard coal, lignite and natural gas, which to a large extent form the basis of German economy.
By 2020 Germany is still expected to witness a fast development of wind farms, especially sea farms, and of
photovoltaic systems.
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Even if we assume a modest estimate of the increase in energy effectiveness in 2020, 47% of the energy used in
Germany will come from renewable sources (fig.1). Presented data covers the losses of a grid, the use of energy by
pumped-storage water power plants and the use of energy by power stations for their own needs (gross power
consumption). Installed capacity and supplied power will triple to 111 GW (that is 278 TWh) in comparison with the
present state.
15
Fig. 1 The division of electrical energy market in terms of a source in Germany in 2020 .
In 2000 German government set an objective defining that by 2010 12.5% of total electrical energy consumed in
Germany would come from renewable energy sources. Rapid development of renewable energy sources in recent
years resulted in exceeding this objective in 2007. The objective of reaching 20% in 2020 is likely to be exceeded in
2011.
16
In 2010 German photovoltaic market was worth over 10 bn euros . They are funds invested in the latest
technologies, the market for producing photovoltaic cells, modules and firms installing photovoltaic systems. At
present the countries where photovoltaics is well-developed, we can notice a considerable and positive impact on
economy. German photovoltaic industry employed 60 000 people in 2010. It is estimated that by 2020 it will have
17
created over 2 million posts globally (200 000 in the European Union) for employees with different qualifications, i.
e. system fitters, highly-qualified specialists in the field of semiconductors in the factories of modules and R&D
centres.
The increase in the production of photovoltaic elements in a given country leads to the development of very modern
technologies and infrastructure. Currently photovoltaic market is very dynamic in technological terms. Dozens of
firms which are being set up operate at all stages of photovoltaic systems production process. Over 90% of
photovoltaic market belongs to siliceous technologies, but in the coming years it is thin cells mounted on flexible and
light base which will play an increasingly important role. Many funds are also invested in research and development
(R&D) and start-ups, which aim at drastic reduction in the costs of photovoltaic systems, popularising them and
achieving so called grid-parity, that is the state in which support is not provided but energy from photovoltaic
systems will be cheaper than electrical energy generated with fossil fuels or than nuclear power.
To tap the significant potential that photovoltaics holds for the protection of environment and climate, for the security
of power supply and for the development of German economy, nine targets need to be met:
Cut systems prices by more than 50% by 2020 - Solar power will become largely competitive in Germany before the
year 2020, thereby achieving independence from support measures in certain relevant market segments. System
prices will be more than halved by 2020 in order to meet existing EEG (Renewable Energy Sources Act) provisions.
As a first milestone, grid parity, i.e. the point at which solar power generation is equal in cost to household electricity
tariffs, will already be reached in 2013.
15
16
17
Agentur für Erneuerbare Energien – ―Industry Forecast 2020‖ 2009/01
EPIA – ―Solar Generation V – 2008‖ 2008.
Ibid.
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Photovoltaic market Germany
German PV market data
New installed
Totally installed end of 2010
Added value of PV sector
No of jobs
No of PV component
manufacturer in Germany
Average of annual market growth
2000 – 2010
PV system price <100 kWp
Q1 2011 per kWp
Production of solar electricity
Share of solar electricity on
demand in 2010
Annually installed PV power
(in MW)
2010
7.4 GWp
7408
17.2 GWp
€10 Bln
ca 130 000
ca 200
3806
68%
€ 2422
1809
12 TWh
1271
2%
670
951 843
118 139
Production of PV modules 2010
3.2 GWp
Production
of PV inverters
2010
Quelle: Bundesnetzagentur,
BSW-Solar
11 GWp
2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: BSW-Solar
© Fraunhofer ISE, 7 June, 2011
Fig. 2 German photovoltaic market in 2010
18
The idea of the development of German photovoltaic industry is based on the assumption that this industry can
guarantee competitive, cheap, safe and clean solar electrical energy until 2020. Photovoltaics will be the key factor
of changing energy system so that the generation of energy is clean and independent entirely based on RES, in
Germany and in the whole world. By reducing CO2emissions developing PV industry plays an important part in the
struggle against climate change. In addition, photovoltaics has a decisive influence on securing energy supplies and
protection of natural resources.
Install 52 to 70 GW of photovoltaic capacity by 2020 – With an installed capacity of 52 to 70 GW and a resulting
share of approximately 10% of the annual gross power consumption by 2020, photovoltaics becomes a key pillar of
energy supply in Germany. In following years, the photovoltaic industry realizes further growth potential.
Limit apportionment for solar power on electricity tariffs to about 2 euro cents/kWh – In 2010, approximately 8 GW of
photovoltaics were installed in Germany; in 2011 approximately 6 GW are expected to be installed. In order to reach
the expansion scenario of 52 GW by 2020 as outlined in the German government‘s national action plan for
renewable energy (NREAP), an annual increase of 3 GW of photovoltaic capacity on average must be attained in
the following years. To reach the dynamic expansion scenario of 70 GW by 2020, an increase of roughly 5 GW per
year is necessary. In both scenarios, based on the current EEG degression corridor, it is possible to limit PV
apportionment to about 2 euro cents / kWh on electricity tariffs. The share of solar power in the EEG apportionment
is at approximately 50%. This translates to an electricity cost burden of less than 2 EUR per month per person in an
average household.
Invest at least 5% of sales in R&D – The German solar industry is intensifying research and development (R&D) in
order to accelerate cost reduction, attain operative excellence on a global scale and assert its position in the face of
international competition. To this end, the PV industry will increase its R&D expenditures and, in the medium term,
will reach the R&D expenditure level of the machinery and plant engineering industry, which is 5% of sales.
Secure at least 12% share of the growing world market for German production – There is high global demand for
German photovoltaics products: By 2020 the German industry will have reached an export quota of more than 80%
and will be able to maintain a global market share in the double-digit range (at least 12% in 2020) for photovoltaics
"Made in Germany‖, given strong global growth of markets and production volume. In the field of photovoltaics, the
German machinery and plant engineering industry will retain its position as a global leader. Together, the companies
in the industry will achieve an export turnover of 14 billion euros (6 billion euros in 2010).
Build up approx. 8.5 GW of PV production "Made in Germany" – Through its investments, the photovoltaic industry
shows its commitment to Germany as a production location. It is expanding German module production and all
upstream production in the value chain from about 3 GW to about 8.5 GW. Similarly ambitious targets exist for all
other technologies (e.g. inverters) along the value chain.
18
German Solar Industry Association (BSW-Solar), Directions for the Solar Economy: PV-Roadmap 2020. A study by
Roland Berger Strategy Consultants and Prognos AG for the German Solar Industry Association. Berlin, November 2010,
available at http://en.solarwirtschaft.de/fileadmin/content_files/roadmap_kurz_engl.pdf.
10/32
Employ at least 130,000 people around German PV technology – In the long term, photovoltaic technology will
secure, directly or indirectly, approximately 130,000 jobs, even if the annual installation volume in Germany declines.
Generate a net economic contribution of at least EUR 25 billion by 2030 – By investing in continuing production
expansion and innovation, the overall economic balance will be stable by 2020, and in the longer term decidedly
positive – by 2030, given the fulfilment of the national action plan for renewable energies, there will be a cumulative
net effect of at least EUR 25 billion. Taking into account savings reached by avoiding climate change impact, this
amounts to a cumulative positive effect of at least 56 billion euros. Moreover, the dependency on imported fossil
fuels is significantly reduced.
Make photovoltaics a key component of the future power system – Through de-centrality and system services,
photovoltaic systems make a significant contribution to the expansion of an environmentally friendly, safe and
affordable future power system.
In comparison with many different technologies, photovoltaics arouses considerable and growing interest due to its
great energy potential. In the coming decades it might become the main source of renewable energy. The major
advantage of this innovative technology is that it uses free, abundant and inexhaustible energy source. The study
which has been carried out by the Institute for Environment and Sustainability in the European Commission's Joint
Research Centre (JRC) in Ispra has shown that the demand for electrical energy in 27 member countries might be
fully satisfied by mounting photovoltaic modules on about 0.71% of the UE area. Assuming that the capacity installed
19
in UE will rise up to about 200 GWp in 2030 , the use of photovoltaics might cause the reduction of emission by
almost 180 Mt CO2. Another important advantage of photovoltaics is that it is highly reliable in emergencies, such as
power cuts resulting from lightning or natural disasters. Photovoltaics generates electrical energy in a decentralised
and independent way and consequently it plays a key role in creating a balanced system of energy management
throughout the world.
The potential of photovoltaics (PV) in Poland is highly underestimated by policy makers and the general public alike.
As a result, the assumption in ―Polish Energy Policy until 2030‖ that by 2020 the nominal capacity of PV installations
in Poland will have reached 2 MW is incorrect because the capacity which has been already installed can be
estimated at 1.7 MW. These installations, however, are not usually connected to the grid (mostly powering road
signs). We think that it is necessary to set a specific target of PV capacity to be installed in 2020 and 2030. Taking
into account the level of capacity already installed, pursuing such aims means stagnation in PV development in
Poland. If Poland wanted to meet the guidelines of the SET Plan (Strategic Energy Technologies), precisely
speaking Solar Europe Industry Initiative (SEII), prepared by the European Union, the total installed capacity in 2020
should reach 1800 MWp.
19
“A vision for Photovoltaic Technology for 2030 and Beyond”– report PV-TRAC,
http://europa.eu.int/comm/research/energy/photovoltaics/vision_report_en.html.
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3
THE IMPACT OF LEGAL AND ADMINISTRATIVE BARRIERS TO PV DEVELOPMENT IN POLAND
The development of all renewable energy sources in Poland is based on using such support schemes as, certificates
of origin for energy produced from RES (green certificates), the obligation to purchase the total amount of energy
originating from RES, soft loans, exemption from excise duty on generated power and non-returnable grants.
Present regulations, despite the intention of supporting the development of RES are already obsolete in many
respects and do not guarantee the actual support for RES. For instance, the system of green certificates has already
become an anachronism It is in force only in five European countries: Poland, Romania (where, however, one
obtains 4 green certificates for photovoltaic energy), Great Britain (but from 1 April 2010 a feed-in tariff system was
introduced for RES under 5 MW) and some parts of Belgium. The other 21 European Union countries, except
Ireland, use a constant tariff, which is the strongest incentive to invest in RES, as a long-term guarantee of
investment profitability.
But even if there are good mechanisms for support and general regulations, the key issue concerns low-level legal
and administrative barriers that may effectively discourage investors from developing photovoltaics as a source of
electrical energy. The barriers usually result from the fact that the law is not adapted to this kind of investment and
are the greatest barrier at the stage of planning and completing PV projects in many European countries.
Bureaucracy and complicated administrative procedures, required by both local offices and grid operators, prevent a
balanced development of PV market, which might be a threat to achieving European objectives related to renewable
energy.
One cannot possibly consider truly massive use of renewable energy sources in Poland if the present support
system is maintained. The level of complexity and costs of this system makes it practically impossible to be used by
the owners of small photovoltaic systems, with just a few kW, on detached houses: any expenses and required
social-security contributions absorb an energy producer's revenue. Furthermore, such systems are treated almost in
the same way as large energy projects. ―Polish Energy Policy until 2030‖ lists some tasks which are expected to be
top priority not only in case of wind farms at sea but also in case of all renewable energy sources. The activities
mean identifying and removing superfluous administrative barriers, simplifying the law and adapting it to connecting
small scattered systems.
Administrative and legal barriers which operate in Poland are the reason why potential PV investors are discouraged
from building installations, which could be connected to the grid in Poland. Poland has a bureaucratic system for
obtaining licences for generating electrical energy and conditions for connecting to the grid. The requirements for
obtaining building permit are vague. What follows, it is difficult to predict how the investment process may be
extended . What is more, as the investment is being designed, it is often difficult to estimate the costs related to
preparing additional technical documentation, which is or might be required by the system's operator or state
administrative organs,, the fact which might considerably influence the calculation of its profitability.
20
Energy law commits transmission and distribution system operators to connecting RES installations to the grid if
there are technical and economic conditions for connecting and purchasing all renewable energy which was
21
generated in them . In practice, if an investor does not have experience, they find it difficult to make use of this rule.
Although there are legal forms of RES support and solutions obligating grid operators to treat such investments as
priority, in practice it is the most difficult to actually enforce these duties. The sellers are legally obliged to buy RES
energy, but first RES systems have to be connected with OSD (distribution system operator) or with OSP
(transmission system operator) network. Energy law makes a grid operator cover only 50% of the costs of the
22
connection with RES below 5MW capacity . OSD and OSP regulations are adapted for connecting large systems,
which makes it necessary to provide much superfluous information.
Some operators state in grid connection conditions that it is necessary to considerably modernise the present
transmission and distribution grid in order to connect a new source of power. Covering such expenses by investor is
unfounded as these are energy companies which are obliged to take care of good technical condition and the
23
development of the grid . In case of large RES installations (above 5MW) entitlement to pay the charge for
st
connection to the grid which amounts to only 50% of the actual connection costs expired on 31 December 2010.
20
21
22
23
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Art. 7 para. 1 of Energy Law.
Art. 9a para. 6 of Energy Law.
Art. 7 para. 8 item 3 of Energy Law.
Art. 7, para. 5, art. 9c, para. 2, item 3 and 4, and para. 3, item 2 and 3 of Energy Law
st
Thus, since 1 January 2011 the investment on a large scale involves new difficulties due to considerable increase
24
in investment costs. .
Energy Law with executive regulations for this act seemingly prescribe actions which should be done to support the
development of RES engineering power. However, it is not defined precisely how it should be done. Consequently,
national and local administration as well as system operators may take independent decisions extending the period
of investment process and generating additional unfounded costs.
The present document has been compiled in the context of the European PV LEGAL Project which is aimed at
reducing bureaucratic barriers in Europe to support the development of photovoltaic industry. The project and this
document define legal and administrative barriers as processes which are caused by the decisions of the authorities
and grid operators which delay or hinder planning and installing PV systems through increasing costs. These
barriers are caused, for example, by demand for information or data such as applications, registrations, licences and
reports, but also by unreasonable fees required by local authorities and operators. Delays can also result from
internal procedures of bureaus and operators which will extend the process of planning, intentionally or
25.
unintentionally
In order to guarantee a 20 per cent share of renewable energy in total energy consumption in Europe by the year
26
2020, the European Union‘s Directive on the promotion of the use of energy from renewable sources contains clear
regulations for creating appropriate framework conditions for renewable energy in Europe. Regarding all
administrative regulations and procedures pertaining to planning and approving RES projects, article 13 of this
directive requires member states to have national rules and regulations which should be fair and reasonable.
Bureaus are thus required to define transparent time schedules and to accelerate administrative procedures. In
addition, simplified and less costly approval procedures should be introduced for small projects. Regarding access to
the grid, article 16 of the ordinance requires that the grid operators provide the system operators with
comprehensive, detailed estimates for connection costs and time schedules for application processing and
27
connecting to the grid.
24
25
26
27
Art. 3 of the Law of 4 March 2005 amending Energy Law and the Environmental Protection Law – Journal of Laws of 2005,
No. 62, item 552
Detailed information regarding the methodology in the project is to be found in Annex I.
Cf. Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of
energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, available
for downloading at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0016:0062:EN:PDF.
For the implementation of Directive 2009/28/EG, the European Law Alignment Act for Renewable Energies (EAG EE) was
passed on 18 March 2011; as outlined in the document, there are still considerable obstacles to connecting PV systems to the
grid. With the EAG EE, the regulations for connecting PV systems to the grid have been expanded and specified. In particular,
the responsibilities and deadlines of grid operators toward those willing to feed-in have been expanded and set out in clearer
terms. In the future, grid operators are required to ―immediately‖ provide those willing to feed-in, once they have requested
grid connection, with a precise for processing their request. As of now, the grid operator must also, ―immediately or within
eight weeks at the very latest‖, provide potential system operators with a detailed time-frame for establishing a connection to
the grid, all required network data to check and identify the grid connection point as well as a clear and detailed cost estimate
for grid connection.
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4
THE ANALYSIS OF BARRIERS CAUSED BY ADMINISTRATIVE AND LEGAL PROCEDURES CONCERNING
THE INSTALLATION OF PHOTOVOLTAIC SYSTEMS AND RECOMMENDATIONS FOR REMOVING THESE
BARRIERS
A small number of PV systems results from the lack of adequate support mechanism and cumbersome legal and
administrative procedures connected with the installation of such systems and with their connection to the grid.
The present analysis shows the results of surveys conducted with the owners of just a few photovoltaic systems
existing in Poland which can be connected to the grid. Three segments of the PV ―market‖ in Poland have been
analysed:
Segment A — up to 30 kW on residential buildings (5 systems),
Segment B — from 30 kW to 150 kW on public and commercial buildings (three systems), 30 – 150 kWp (3
systems),
Segment C — above 150 kWp, ground-mounted systems (currently, such systems do not exist in Poland, but they
should appear in 2011).
Apparently, there are no significant differences between the three segments except the fact that it is necessary to
obtain a building permit for segment C, whereas it is sometimes required for segment B and it is not required for
segment A. The only difference is the requirement for a building permit, which is mandatory in segment C,
sometimes required in segment B and not required in segment A.
On the basis of such a small research sample it is difficult to assess matters concerning time for completing the
projects, the amount of work and the actual costs. However, we can determine what barriers are faced during the
installation of photovoltaic systems.
Legal and administrative barriers are similar for all identified segments. They significantly hinder the production of
PV energy by discouraging investors from making an effort to invest in transmitting produced energy to the grid.
These barriers involve burdensome administrative procedures which extend the investment process and the costs
which question the profitability of such investment. The barriers are listed below in order of their negative influence
on the development of photovoltaics in Poland.
Barrier 1: The lack of appropriate support system for the development of photovoltaics.
Barrier 2: Legal and administrative procedures connected with the obligation to run a business.
Barrier 3: Specifying the conditions for the connection to the grid, connecting a PV system to the grid,
commissioning and authorizing to operate.
Barrier 4: Obtaining a licence for generating electrical energy.
Barrier 5: Local land development plan.
Barrier 6: The installation of PV systems.
Barrier 7: Obtaining certificates of origin, the so-called green certificates and activity involved.
4.1
Barrier 1: Lack of appropriate support mechanism for the development of photovoltaic market.
Only through the existence of an appropriate support system, allowing efficient allocation of resources which support
the development of new technologies concerning renewable energy sources, it is possible to create a market of a
substantial size. Unfortunately, the system of green certificates that is currently in force in Poland, is not such a
system. It only refers to the amount of produced energy regardless of its source and the size of the installation.
Moreover, making use of the RES on a mass scale is impossible if the present mechanism continues due to the level
of its complexity and costs, which makes it useless for the owners of small photovoltaic systems on detached
houses, with a few kW.
More information on this barrier is included in the document concerning issues on the regional level. arrier 2: Legal
and administrative procedures, social-security contributions
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This barrier primarily relates to small, but also medium-sized photovoltaic systems. To obtain a licence for the
production of electricity from RES, it is necessary to start a business (or to extend the profile of a firm which already
exists). When a natural person registers a business, they have to follow the standard procedure of setting up a
business in the Community Office.
A person running a non-agricultural business is subject to obligatory retirement, disability pension and accident
insurance from the date of commencement of activity until its cessation. A person engaged in business activity is
also subject to mandatory health insurance. Sickness insurance is voluntary, at a person‘s request, which means
that the sum of contributions to the Social Insurance Institution (ZUS) amounts to 841 or 890 PLN per month
respectively (in 2011).
Revenue from photovoltaic installation
1. A contract of selling electrical energy (PPA)
The seller is obliged to purchase electrical energy produced in renewable energy sources connected to the
grid on this seller's operating area (Article 9a legal law 6 Energy Law) This obligation relates to all offered
energy generated in renewable energy sources (§ 13 in the Decree of the Minister of Economy of 14 August
2008).
2. The property rights sale contract (CPA)
It is the entities that sell electrical energy to consignees that are obliged to obtain a certificate of origin or of
replacement fee payment and then to submit them to the President of URE for a write-off (Article 9a legal
rule 1 Energy Law) The share of total electrical energy resulting from the certificates of origin and a
replacement fee in the total annual sales – 10.4% in 2011 (§ 3 of the Decree of the Minister of Economy of
14 August 2008).
Regulations clearly indicate that from 1 January 2010 the revenue from the sale of certificates of origin is classified
as the revenue from a business activity (before this date it was not clear).
Taxation
 VAT





Taxation on general terms (from 2011 — 23%).
In the case of small entrepreneurs the possibility of using tax exemption is applicable if the sales value does
not exceed 150 000 EUR per year (since 2011)
Excise
 Taxation of energy sale to a consignee
 Exemption for energy from renewable sources of energy (the basis for exemption is a document of remission
of a certificate of origin).
CIT (in the case of a company)
 Taxation of revenue on general terms with the rate of 19% (in 2011).
PIT (in the case of a natural person's business activity)
 Taxation on general terms, as revenue from business activity
 The possibility of choosing to settle the revenue on special terms (a flat tax). On the basis of legal rule
concerning a flat-rate income tax on some revenues of natural persons, it is possible to tax with a flat-rate
tax of 5.5% on the revenue from:
o sale of certificates of origin received by energy companies engaged in the production of electrical
energy in renewable sources of energy
o the sale of generated electrical energy
4.1.1
The analysis of / reason for the barrier
Case 1. An owner of a single-family home, unemployed, is realising an investment in roof-mounted photovoltaic
2
system with peak power of 3 kW (modules with a total area of about 20-45 m , depending on a chosen technology).
The total energy generated by PV system is sold to the grid.
Requirements:
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



Establishing a business (on general terms), opening a bank account, proceeding a notification for the Social
Insurance Institution (ZUS) and Tax Office.
Obtaining a licence for energy production
Connection to the grid, a purchase/sale contract with an electricity distributor
Creating an account on the energy exchange.
Balance of costs:

The Social Insurance Institution discount for new entrepreneurs for 24 months — monthly contributions, a
total of 367 PLN which amounts to 4404 PLN per annum; from the 25th month of business activity — 890
PLN per month, i.e.. 10 680 PLN per annum.

The costs of connection, documentation, monitoring equipment (including electricity meter) and costs
associated with the sale of energy on the exchange will be omitted.

An annual yield of PV system in Poland is around 850 kWh / kW (this follows from the characteristics of solar
radiation on our latitude and the number of sunny days per year), which for a system with a capacity of 3 kW
equals 3 x 850 = 2550 kWh of energy generated annually

Assuming that an obtained price (total) is about 460 PLN / MWh (the price consists of two components: an
average price of electrical energy and a charge for the sale of certificates of origin; in 2010, they amounted
to, respectively, 195 PLN and 268 PLN), the revenue is 460 x 2.55 = 1174 PLN per annum

Flat-rate tax of 5.5% amounts to 64 PLN, so the revenue is about 1110 PLN per annum, assuming a VAT
exemption

Tax is 5.5% x 1174 PLN = 64 PLN, so the resulting gain is about 1110 PLN per annum

Assuming that the total cost of the system installation is around 12 PLN/W (3 EUR / W) so 12 x 3000 =
36000 PLN
Generated revenue (1110 PLN net of tax) is about 10% of the cost of running a business. For a system with a
capacity of 30 kWp the surplus exceeding operating costs and taxes in the first two years would be 6680 PLN, and in
the following only 400 PLN. That means that in the case of small and medium-sized systems there will never be a
return on the investment (despite the fact that the balance does not include the costs of the connection to the grid
and of trading in energy)
Case 2. As mentioned above, but an investor is already running a business.
Requirements:

A change of the profile, extending the scope of the business (notification),

Other - the same as in Case 1.
Balance of costs:

Contributions to the Social Insurance Institution (ZUS) are discharged within an existing business, so they
can be omitted in the balance, ·

Energy yield, revenue and the costs of the system as in Case 1.
Taking into account the calculated profit the time needed for the return of investment is 36 000/1110 = 33 years, and
this is more than an expected life of the system (25-30 years). It is worth noting that with the increase in system
capacity the revenue (generated energy), tax (flat rate tax) and a building cost of the system increase
(proportionally). This means that the time needed to gain a return, defined by dependence: the time of return to the
building cost / (revenue - taxes) remains constant - the investment will not be returned because the system
components will wear out after a shorter period of time.
4.1.2
Suggestions for overcoming the barrier
The abolition of the need to set up a business by the producers of renewable energy with a capacity below 150 kW.
A VAT exemption for renewable energy
Elimination of the need to obtain licences as a requirement to obtain certificates of origin (or to participate in other
support mechanisms)
Use of an appropriate support system (FiT).
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Barrier 3: Specifying the conditions for the connection to the grid, connecting a PV system to the grid, commissioning
and authorizing to operate.
The investor applying for grid connection, which has legal title to use the facility to be connected to the grid, must
28
submit an application for specifying connection conditions . The application must be made to the Transmission Grid
Operator or the Distribution Grid Operator, to whose grid the investor wishes to connect. The application form is
defined by the Grid Operator. The application for specifying connection conditions contains an extract from a local
Land Development Plan or a zoning decision and in case of larger systems (over 2 MW) also an analysis of the
29
influence of the connection on the grid. In addition, the applicant is obliged to pay within fourteen days of the
application submission a deposit on the connection fee of 30 PLN per 1 kW of switching power (30,000 PLN per 1
MW). The application for specifying connection conditions contains technical information about the devices to be
30
connected and declaration of annual energy production .
More information on this barrier is included in the document concerning issues on the regional level.
4.2
Barrier 4: Local Land development plans
4.2.1
The analysis of / reason for the barrier
According to the Area-planning and Area Management Act in the area where a land development plan exists an
investor may only pursue investments which follow the plan. It means that production investments are not allowed in
the area designated for residential or commercial buildings. A PV installation is built to connect it to the grid and to
sell electrical energy so it is considered as production installation and theoretically it cannot be situated in areas
intended for residential or commercial buildings.
More information on this barrier is included in the document concerning issues on the regional level.
4.3
Barrier 5: Obtaining a licence for generating electrical energy
4.3.1
The analysis of / reason for the barrier
A licence is obligatory for running a business engaged in every kind of electricity generation, including RES
generation, because the national administration need to know the total capacity of the country and be able to
balance the power of various sources. It is reasonable in the case of large production installations, but not in the
case of small systems as they are not significant point of this balance. Actually, the licence obligation plays a
supervising and rationing role, which would be necessary if connecting PV systems to the grid could cause the
overload. However, such a risk is hardly probable taking into account the predictable scale of investment .
According to Energy Law obtaining an electricity production licence is a prerequisite for obtaining certificates of
31
origin and the generation of electricity from RES itself, regardless of the capacity of the generating installation .
32
Optionally, one can request a licence promise , which would guarantee within the period of its validity that the
licence for the kind of activity described in the promise would be issued, unless there have been changes in the
factual or legal state of affairs stated in the application for the promise. It is useful to have a promise while applying
for the investment funding. Obtaining a licence promise is not the investor‘s obligation. Conditions and procedure of
the promise issue are the same as for the licence itself, however, some documents may be delivered later, at the
stage of obtaining the licence. The licence is issued only after the construction of the system has been completed.
―Licence application‖ should be submitted to the President of the URE. The applying company has to fulfil the
requirements defined in art. 33 para.1 of Energy Law (seat or living place in the EU, sufficient financial assets,
technical capacities, qualified workers, outline planning decision). Apart from the application, in the case of PV
33
installations 19 different documents must be enclosed . The documents confirm that organization conditions
28
29
30
31
32
33
Art. 7, para. 3a and the following of Energy Law
Amendment to Energy Law, September 2011
Para. 7 of the Decree of the Minister of the Economy of 4 May 2007 on detailed conditions for the functioning of the power
system (Journal of Laws of 2007, No. 93, item 623 with later amendments)
Art. 32, para. 1, lit. b of Energy Law
Art. 43 of Energy Law
Source: www.ure.gov.pl
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enabling the company to pursue the licence activity have been fulfilled, as well as that technical requirements have
been met .The documents should also contain the confirmation of the financial assets of the investor and good
behaviour certificate. There is no simplified procedure for small systems.
The documents which are listed as necessary to submit to obtain a licence include a building permit. It is not clear if
URE accepts a notification of construction instead.
Since only entrepreneurs can obtain a licence for producing electrical energy in renewable energy sources (not
natural persons who do not run a business), a person wishing to install even a small photovoltaic system is forced to
start a business (if they have not run one up to now). If a natural person wants to produce energy for their own
needs it is not necessary to obtain a licence. Starting a business is connected with a duty to pay contributions to the
Social Insurance Institution and as a result, in the case of a small installation the revenues from the sale of energy
do not make such an investment profitable (see Barrier 2).
34
According to the law , if a person applying for a licence provides all required documents and there are no specific
reasons for rejecting the application, the licence has to be issued.
The existing PV licence system is a burdensome administrative procedure extending the investment process. Small
systems' investors (of up to 30 kW) are discouraged and resign from connecting the installation to the grid.
4.3.2
Suggestions for overcoming the barrier
Obtaining a licence promise is actually a bureaucratic procedure. Environmental conditions and possibility of
connecting to the grid are not considered at this stage. They are assessed later. Simplification of the procedure
should be taken into account in the case of small and medium systems. Good solutions would be replacing a licence
with a notification of investments of up to 30 kW to URE.
Setting up a business should not be obligatory in the case of small installations (of up to 30 kW) while electricity
production is not the main activity. As most PV systems are small and medium installations, the procedure
simplification or elimination would contribute to significant increase in the use of RES electricity in Poland and to
faster PV development. Last but not least, administrative bodies would avoid wasting time for bureaucratic
procedures in order to prepare needless documents.
4.4
Barrier 6: The installation of PV systems
4.4.1
The analysis of / reason for the barrier
When a building permit is required for an investment, duration of the system installation depends on its situation
regulated in the Building Law.
If an investment meets the requirements of a land development plan, a building permit may be obtained relatively
quickly and the procedure is not very complex.
If the system is to be installed in the area without a land development plan, the procedure is complex, a great
number of documents have to be submitted and eventually obtaining of the permit is up to the local administrative
body. If the application for a permit is rejected, the investor may appeal to the Local Government Appeals Board and
then to an administrative court but waiting for a positive decision may last several months or even years.
More information on this barrier is included in the document concerning issues on the regional level.
4.5
Barrier 7: Obtaining certificates of origin, the so-called green certificates and activity involved
4.5.1
The analysis of / reason for the barrier
According to Energy Law a licence for RES electricity production entitles one to business activity involving only RES
electricity production and in consequence to obtain certificates of origin. Additional procedures are necessary to
obtain the certificates. Certificates of origin are issued by the President of URE on the basis of the producer's
35
application . The amount of energy produced and declared in the application has to be confirmed by the grid
34
35
Art. 56 of the Law on Freedom of Economic Activity
Art. 9e, para. 3 of Energy Law
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36
operator . The applications have to be submitted monthly (or less often but it delays issuing the certificates) by the
14th day of the next month.
It is necessary to open an account on the Polish Power Exchange (TGE), where certificates of origin will come in for
37
the energy produced in RES. . To obtain a certificate of origin one needs to fill in an application available at the
website, together with numerous attachments
Once the application has been accepted the certificates of origin are issued in paper or digital form into an agreed
account on the Polish Power Exchange. The owner of the certificates may freely trade them on the Polish Power
Exchange. Trading green certificates (certificates of origin) is actually the sole form of support for producers of RES
electricity, apart from exemption from excise duty and the obligation to purchase energy generated in RES.
Severe administrative requirements, an obligation to start a business, frequent even monthly submission of
applications make an administrative burden for small (a few kW) systems completely inadequate.
Obscure regulations concerning taxation on certificates of origin are the reason why local tax offices often consider
the revenues from the sale of these certificates as revenues from financial instruments, which means imposing a
19% tax. Other offices allow a flat tax of 5.5 %.
The system of certificates is troublesome, expensive and time-consuming. Even small producers have to meet the
same bureaucratic requirements as the largest companies. In addition, if they do not run a business; they have to set
it up if they want to send the energy surplus to the grid. The benefits from the sale of green certificates do not
compensate for the work needed for administrative procedures.
The procedure which covers issuing certificates is defined by Energy Law. It is extremely complex and requires a
great deal of administrative work which is neither commensurate with the scale of PV energy production nor with
possible revenues.
Continuing such system is the reason why the producers of energy in RES, and especially from PV are not
motivated to increase the production and trade the energy. Additionally, even small producers have to set up a
business to take part in the system.
One cannot possibly consider really massive use of renewable energy sources if the present system is maintained.
The level of complexity and costs of this system make it practically impossible to use it by the owners of small
photovoltaic systems, with a few kW, on detached houses. A ―flat system‖ of green certificates does not vary the
support on the basis of the size of the insta+llation and the amount of generated energy. As a result the
development in Poland concerns only large-system wind and biomass co-firing energetics.
4.5.2
Suggestions for overcoming the barrier
The feed-in tariff system should be introduced as soon as possible because it is an effective financial incentive for all
investors who are ready to invest in RES.
If the system of green certificates is retained, we should enable natural persons to trade certificates of origin on a par
with other business entities, without being obliged to set up a business and obtain licences for production of
electrical energy. It is also necessary to vary a number of green certificates depending on the type of production
installation and its size. Small and medium-sized installations should receive more certificates than large ones.
36
37
Art. 9e, para. 5 of Energy Law
Art. 9e, para. 7 of Energy Law and art. 50b, para. 1 in connection with art. 9 para. 3 Item 4 of the Law on Commodity
Exchanges of 26 October 2000 (consolidated version Journal of Laws of 2010, No. 48, item 284 with later amendments)
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5
SUMMARY OF LEGAL AND ADMINISTRATIVE FRAMEWORK FOR PHOTOVOLTAICS IN POLAND
Generating electrical energy from PV is, according to all legal and administrative regulations, treated in the same
way as other RES. As a result, small and medium systems (which have the greatest potential) are regarded as large
wind farms — their owners have to fulfil similar requirements. Thus, investors are discouraged from building PV
installations which might have a power surplus that could be transmitted to the grid.
Even small and medium systems which are built with the aim to sell the surplus of power to the government vendor
or other retailer interested in electricity purchase need to meet the same requirements as production companies.
The investor is obliged to set up a business and the system must be placed on or near the building situated in the
production area. This limits the possibility of building commercial installations on residential or commercial buildings.
Acts, such as Energy Law, theoretically support the development of PV energy but as they are not precise and
vague, might be freely interpreted by local administration and local grid operators. If the decision made by these
bodies is unfavourable for the investor, one can appeal to the Energy Regulatory Office, common court of law,
administrative court, the Supreme Court. However, these procedures are long-lasting and while the case is being
considered the investor cannot start building the system. The money which has already been invested is ―frozen‖ for
a long, unpredictable time, which badly affects the investment‘s profitability.
Construction Law does not respect PV peculiarity so regulations may be freely interpreted. It is up to an office
worker‘s decision, whether a building permit is required. Actually, the investor does not know how the installation will
be classified, which affects the costs and the time necessary to prepare the investment.
Apart from that, the crucial factor of PV development in Poland is the introduction of feed-in tariff.
Barri
er
No.
Procedure/ name
of barrier
1.
Lack of
appropriate
support system
The body
responsible
Polish Sejm
The Minister of
the Economy
The Energy
Regulatory
Office
The source of law
The Decree of the
Minister of the
Economy of 4 May
2007 on detailed
conditions for the
functioning of the
power system
Energy Law
2.
3.
Legal and
administrative
procedures
The conditions for
connecting PV
system to the grid,
the connection of
this system,
commissioning
and authorizing to
operate.
Polish Sejm
Energy Law
The Minister of
the Economy
Tax Ordinance
The Minister of
the Economy
The Decree of the
Minister of the
Economy of 4 May
2007 on detailed
conditions for the
functioning of the
power system
TGO, DGO
Polish Sejm
The Energy
Regulatory
Office
20/32
Energy Law
Instructions for Traffic
and Use of the
An option
Including the real potential of solar energy in
strategic planning of Polish energy policy
Introduction of FIT
Financing investments in photovoltaic systems from
―Infrastructure and Environment‖ Operational
Programme and National Fund for Environmental
Protection and Water Management
Setting a goal of 1.8 GWp of installed PV power in
2020 (1% of consumed electrical energy) and 10
GWp in 2030
Abolition of the requirement to set up a business for
RES producers below 150 kWp
a VAT exemption for RES
Simplification of administrative procedures and grid
connection procedures
RES systems with capacity of up to 30 kW do not
require a permit for connection to the grid
Specifying uniform technical conditions for
connecting PV systems to the grid for all grid
operators (separately for TGO and DGO).
Defining deadlines for the realization of the
connection of PV systems to the grid and a system
of penalties for the operators who do not observe
these dates. Introduction of a flat-rate charge for the
connection to the grid for PV energy producers
4.
Distribution Grid
dependent on the installed nominal capacity.
Energy Law
PV systems with capacity of up to 120 kW may be
mounted in the areas designated for residential
buildings and services
Local land
development plan
Polish Sejm
5.
Obtaining a
licence for the
production of RES
energy
Polish Sejm
Energy Law
RES systems with the capacity of up to 30 kW do
not require obtaining licences for the production of
electricity, yet can participate in the support
mechanism
6.
Construction of
PV system
Polish Sejm
Construction Law
PV systems with an unladen weight of up to 200 kg
and mounted on the roofs of free-standing
residential and commercial buildings and the
systems with the capacity of up to 120 kW do not
require a building permit. The PV systems
generating electricity with a capacity of up to 120 kW
can be built in the areas covered by the local Land
development plan, which are designated solely for
residential or commercial buildings.
Obtaining
certificates of
origin for energy
produced in RES
– ―green
certificates‖
Polish Sejm
7.
The Area-planning and
Area Management Act
The Area-planning and
Area Management Act
Energy Law
The introduction of a feed-in tariff for the energy
produced and sold in PV systems
Tax Ordinance
Proceeds from the sale of electricity in renewable
energy sources are taxed at a flat rate of 5.5% and
apply to businesses and individuals not engaged in
business activity
Described barriers are based on the analysis of the legal state at the end of August 2011. In the ―Polish Energy
Policy until 2030‖ photovoltaics does not play any part at present or in the future. Lack of possibilities to finance the
investments in photovoltaic systems from the ―Infrastructure and Environment‖ Operational Programme or National
Fund for Environmental Protection and Water Management programme for RES is the evidence of unfavourable
attitude of yet another Polish Government towards photovoltaics. Such attitude is extremely different from the one
represented in neighbouring countries of similar climatic conditions.
Aforementioned barriers to the development of photovoltaics in Poland are based on an analysis of the legal status
at the end of November 2010. In a resolution "Polish Energy Policy until 2030" approved by The Council of Ministers
photovoltaics plays no role now or in the future. Lack of funding opportunities for investment in photovoltaic systems
from the Operational Programme "Infrastructure and Environment" and the National Fund for Environmental
Protection and Water Management for projects in renewable energy proves unjustified hostility of the Polish
government towards photovoltaics. This approach is radically different from those represented by the neighbouring
countries with similar climatic conditions.
Suggestions for the development of photovoltaics in Poland
38
In consequence, we must insist on introducing the process of PV development which involves :
 Taking into account actual potential of solar energy while strategically planning Polish energy policy;
 Promptly introducing a stable tariff (a feed-in tariff) with the following parameters:
38

Guaranteeing a price which allows for attractive period for investment return (6-7 years for private investors
and 9-10 years for commercial investors), making it easier for investors to access investment resources (e.g.
soft loans),

The price of electrical energy dependent upon the size of PV system, the installation site and a type of an
investor, the price which is preferential for small PV systems, with a few kW and PV systems integrated with
building industry

A long period of validity (15-20 years),
The position of Polish photovoltaics community on the project ―Polish Energy Policy until 2030‖ edited by dr Stanisław M.
Pietruszko; http://forum.pv-polska.pl/index.php?option=com_content&task=view&id=2&Itemid=6. April 2009.
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
Controlled reduction of tariff for new installations, every half a year, dependent on technological advances
(so called margin of the amount of installed capacity)
 Integrating with other politicians in the long run (with politicians who set the conditions for investment activity)
 Identifying and removing superfluous administrative barriers, simplifying the law and adapting it to connecting
small scattered systems should be top priority with relation to all renewable energy sources.

Making it possible to finance investments in large photovoltaic systems from the funds of operational
programme ―Infrastructure and Environment‖ and from the National Fund for Environmental Protection and
Water Management.

Setting an objective of installed PV power of 1.8 GW in 2020 (which amount to 1% of used electrical energy)
and 10 GW in 2030.

Starting R&D programme which has good prospects for photovoltaic cells technologies.

Starting introductory and educational programmes (e.g. 1000 solar schools).
Possibilities of developing home-grown photovoltaic industry, which has potential of significant increase of national
energy security in the long perspective, are limited by lack of domestic PV market. EU countries are the largest
market for photovoltaic systems (7 out of 10 largest markets are EU countries). Poland, with full access to this
market has an exceptional chance to participate in reshaping the future of European energetics and to gain
economic benefits from it. Buying nuclear reactors from abroad will not bring such benefits. Now it is time to ensure
that in 20 years Poland will not be merely an importer of photovoltaic systems or European assembly plant of
photovoltaic modules for far-east corporations.
Support for photovoltaics gains special importance in context of efforts aiming to considerably reduce CO2
emissions, which Poland is obliged to do by international provisions. Increasing share of renewable energy sources
in general energy balance to required level of 15% will be difficult to achieve with usage of biomass and wind power
only. Due to necessity of quick pace of change of energy supply structure it is necessary to reach for wider range of
technologies than above mentioned. Installation of small photovoltaic systems does not require long preparations. If
they are used widely, there would be an easy speed-up of capacity growth installed in renewable energy sources.
An advantage of quick installation of large number of photovoltaic systems is that they require little land, it is possible
to use roof surfaces and in consequence, there is no need to change land development plans and people who live in
the vicinity do not organise any protests (this technology does not emit any noise, oscillations and does not affect the
landscape — on the contrary, a system may well compose with a building). Besides, the possession of small,
household PV systems would increase ecological awareness of the society. PV systems proved to be a reliable
source of energy for public buildings, for keeping communication in crisis situations or in the case of natural
disasters.
The use of large-scale PV modules can enable the acceleration of growth of installed capacity in renewable energy
sources because the installation of small photovoltaic systems does not require time-consuming preparation. What
facilitates a rapid installation of a large number of photovoltaic systems is low demand of this technology on land, the
possibility of using the roof surface, and hence no need for changes in the land development plans. From this point
of view photovoltaics in Poland (while achieving targets set by the EU) may prove to be a fast alternative to achieve
the capacity from RES, as opposed to wind energy or biomass, in which the investment process can take up several
years.
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ANNEX I: METHODOLOGY OF RESEARCH
The Aim of the Project PV LEGAL
Although many countries have recognised the potential of solar energy in the meantime and are implementing
market launching strategies and support programmes, administrative processes and approval procedures still
require a good deal of improvement in many EU countries. Bureaucratic hurdles are among the problems that have
so far made it impossible to effectively exploit the potential of the sun as a source of energy.
The European PV LEGAL Project has set itself the target of identifying and reducing administrative hurdles to
planning and installing PV systems. In Europe planning and connecting a solar power system to the grid is a process
that can still take several years. The reasons for the delay are often to be found in too high bureaucratic barriers. PV
LEGAL wishes to reduce formal requirements on many of the markets in Europe and thus reduce the development
time of PV projects.
The PV LEGAL Project is supported by the European Commission in the context of the programme ―Intelligent
Energy Europe―. The institutions which are involved in this project are: 13 national PV industry associations, the
European association EPIA and the consultancy eclareon GmbH. The project is being coordinated by the German
Solar Industry Association, BSW-Solar.
The PV LEGAL Database
In the first phase of the project, an extensive database was created for the analysis of bureaucratic hurdles which
identified some massive barriers for investors in PV systems in the selected EU member states.
The PV LEGAL database provides a plethora of information for three market segments: small PV systems on
residential buildings, medium-sized PV systems on commercial buildings and ground-mounted PV systems. For
each of these segments the stages of projects have been identified and described in detail with information
pertaining to duration, waiting periods and legal and administrative costs of the process.
Free access to the PV LEGAL database is available at: http://www.pvlegal.eu/database.html.
Methodology
Most barriers have been identified in the research designed for the database of PV Legal. There were two stages of
the research:
1. a thorough analysis of legal and administrative regulations,
2. a coordinated survey of stakeholders in PV industry.
The first stage provided quality descriptions of legal and administrative steps which have to be taken to successfully
complete the project of developing photovoltaics. The market segments, the processes of project development and
the barriers associated with them were researched by respective national PV associations. Polish Society for
Photovoltaics has conducted a study using their experience and compared results with the representatives of the
industry and legal experts working in PV industry. A quality check was carried out by eclareon Ltd.
The second stage, the PV LEGAL industry stakeholders survey, provided quality data (such as duration, waiting time
and the expense rates with regard to identified processes and barriers) and thus practical information for the
participants in photovoltaic market. According to the size of their PV market PV LEGAL Project partners conducted
enough interviews to get a good sample of PV companies operating in each segment. Regarding the size of our PV
market Polish Photovoltaics Society conducted a few interviews. PV Legal methodology used is based on the
internationally accepted methodology of the Standard Cost Model (SCM). For more information, please refer to the
project website of PV LEGAL (http://www.pvlegal.eu/presentation/project-methodology.html).
The recommendations of PV Legal
At a further stage the project partners developed, on the basis of the PV LEGAL database, suggestions for
improvement for decision makers and grid operators in order to provide the relevant players with specific decision
templates and best-practice examples and to reduce the barriers in the country. This document presents
recommendations prepared by Polish Society for Photovoltaics which were presented at the conference
―Photovoltaics: Perspectives of Development in Poland‖ in Warsaw 16 December 2010. The opinions and remarks
collected during the conference and during many meetings with the authorities and the grid operators finished in
August 2011 was used to supplement the document.
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ANNEX II: DESIGNING AND INSTALLING PHOTOVOLTAIC SYSTEMS IN POLAND
TABLE OF CONTENTS
1
INTRODUCTION
24
2
SITE SELECTION
25
3
LEGAL AND ADMINISTRATIVE PROCEDURES
26
4
ADMINISTRATIVE PROCEDURES
28
5
CONDITIONS AND A CONTRACT OF PV SYSTEM CONNECTION TO THE GRID
29
6
OBTAINING A LICENCE FOR THE PRODUCTION OF ELECTRICAL ENERGY IN RES
29
7
THE CONSTRUCTION OF PV SYSTEM
30
8
CONNECTION TO THE GRID, COMMISSIONING, OPERATION
30
9
ADMISSION TO RES SUPPORT SCHEME
31
1 INTRODUCTION
The present annex presents successive stages of the investment process for small (up to 30 kW) photovoltaic
systems mounted on the roofs of residential buildings and medium-sized (30-150 kW) PV systems in Poland. In the
case of small photovoltaic systems it can be stated that the current law is totally inadequate for their installation
because the same rules apply both to large energy companies and small producers of energy. The law does not
involve any help or simplified procedures for the connection of small systems to the grid. Although there are some
additional benefits for systems smaller than 5 MW but placing the same requirements for 3 kW and 3 MW systems is
a misunderstanding. For smaller investors the necessity of setting up a business may be problematic. Another
obstacle is the obligation to obtain a licence for the generation of RES energy, which is not difficult as such, but
requires one to submit a large number of documents. It can discourage a potential investor. The system of green
certificates is also administratively burdensome. Grid operators have no experience or knowledge regarding the
connection of small energy sources to the grid, which makes them engage people and time in the process, whereas
it gives small profits. The support system for RES based on green certificates does not differentiate the size of the
installation and technology which was used to produce electricity. In this way, the installations which are promoted
are high power systems, such as wind or biomass co-firing systems.
There are no specific provisions relating directly to PV systems, with the exception of art. 29 of Construction Law,
which states that free-standing solar collectors do not require a building permit. The notion of ―free-standing solar
collectors‖ may be variously interpreted. The decision whether a system requires a building permit or not depends on
the interpretation of the law by an official. If the official decides that the installation of modules is no interference in
the structure of the building, a notification of construction is sufficient.
In the following part procedure the installation and connection photovoltaic system to the grid in Poland will be
discussed at. Systems from segment A (up to 30 kW on the roofs of residential and commercial buildings) and B (30
- 150 kW on public buildings).
The basic obstacle for an investor is the obligation to run a business as the costs of social-security contributions
exceed the revenue from the sale of generated electrical energy (see stage 2).
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2
SITE SELECTION
Procedure: Estimation of solar irradiance and shadowing
Estimation of access to solar energy, shadowing, the desired level of integration of the system, and its design is
carried out by the installer chosen for designing and installing the system. No market exists for the leasing of roof
space for the installation of PV systems. In the cases to date, developers have had sufficient roof area on which to
install PV systems. Due to the small size of the market and the individual nature of PV system investments, the
entire process is usually conducted by a single installer.
Procedure: Checking the land development plan. (Only systems requiring a building permit – according to art. 30,
para. 6 item 2 of Construction Law also in case of the realization of building works on the basis of a notification the
authorities shall verify their compliance with a local land development plan and state objections in case of
discrepancies)
Procedure: Decision on building conditions (Only systems requiring a building permit)
An application for a decision on building conditions: a precise outline of the building site on the map (construction
works), description of the character of the construction works (installation of a PV system) and the necessary
infrastructure connections are required. This information is only approximate in character; no blueprints or
conceptual plans are required. Exactly described technical parameters are also not required. Only on the basis of
those guidelines from the decision on building conditions can the construction plans be drafted.
Procedure: Application for the construction of PV systems (which do not require a building permit)

In accordance with Article 29, paragraph 2, point 16 of Construction Law, a building permit is not required if
construction works mean mounting free-standing solar collectors.

In accordance with Article 30 section 1, Construction Law requires notification to the competent authority to
perform construction work involving the installation of equipment with a height of 3 m above the buildings.
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
3
Applications must be submitted before the intended start of works. Construction work can start, if within 30
days from the date of delivery of notification, the competent authority shall not make, by decision of the
opposition and not later than 2 years from the date specified in the declaration of the commencement.
LEGAL AND ADMINISTRATIVE PROCEDURES
To obtain a licence for the production of electricity from RES, it is necessary to start a business (or to extend the
profile of a firm which already exists). When a natural person registers a business, they have to follow the standard
procedure of setting up a business in the Community Office.
Business activity:
 for natural persons - a necessary entry in the register of businesses made in the proper local office of the
commune (district);
 alternative - a business start-up and registration of entrepreneurs in a national court register;
 In both cases it is necessary to notify of starting a business activity in:
- tax office (NIP-1 and VAT-R — if the company will be liable to pay VAT)
- Statistical Office (obtaining a REGON number)
- The Social Insurance Institution
- Opening a bank account
The Social Insurance Institution
 A person who runs a non-agricultural business is subject to obligatory retirement, disability pension and
accident insurance from the date of commencement of activity until its cessation. A person engaged in
business activity is also subject to mandatory health insurance. Sickness insurance is voluntary, at a
person‘s request, which means that the sum of contributions to the Social Insurance Institution (ZUS)
amounts to 841 or 890 PLN per month respectively (in 2011).
 However, if such a person is simultaneously employed under a contract of employment or service contracts,
they are subject to compulsory social insurance only with respect to such employment or contracts. Such
persons may voluntarily, at their request, be covered by retirement and disability pension insurance for
business. When the salary received from the employment contract or a contract of mandate is lower than the
minimum wage (in 2010, 1317 PLN, in 2011, 1386 PLN), they are subject to mandatory retirement and
disability pension insurance for business, regardless of the amount income earned from this activity. A
person engaged in business activity is also subject to mandatory health insurance (243 PLN per month in
2011).
 The IT system of the Social Security Institution requires submitting the first two monthly statements, from the
third month it is not necessary to submit statements, one should only make monthly contributions to the
bank account of Social Security Institution.
 Self-employed persons are required to pay a monthly premium for health insurance (243 PLN per month in
2011). Health insurance contribution of up to 7.75% of income which is the basis for its specification is
deductible from income tax on natural persons (209 PLN in 2011). In the case of health premiums there are
not any concessions for individuals who start a business.
The Act from 1 July 2005 amending the act on social security system and some other acts is in force since 24
August 2005 (Journal of Laws No. 150, pos. 1248). This means that people who start a non-agricultural business
after 24 August 2005, may pay, within 24 calendar months from the commencement date of activity, social-security
contributions (ZUS) on the declared amount but not lower than 30% of the minimum remuneration for work. This
means lowering the rate by half relative to the standard level (60%).
Preferential rules of paying contributions only apply to individuals engaged in non-agricultural business activity on
the basis of regulations on business activity or other special provisions who:
 started a business activity not earlier than 25 August 2005,
 during the past 60 calendar months before commencement of the business did not have a non-agricultural
business,
 do not do business for the former employer on whose behalf before the commencement of business in the
current or preceding calendar year, been engaged in employment or employment relationship of cooperative
activities within the scope of business activity.
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In 2011 the minimum wage is 1386 PLN. The basis of premium rate for retirement and disability pension insurance
for individuals who start a business is therefore 415.80 PLN. For all insured individuals premium rates are:
 retirement insurance - 19.52% of the basis,
 disability pension insurance - 6.00% of the basis,
 health insurance - 2.45% of the basis.
In 2011 a social-security contribution of the individuals mentioned above who follow preferential rules of paying
premiums, cannot be lower than:
 81.16 PLN - retirement insurance,
 24.95 PLN - for disability pension insurance,
 10.19 PLN - for sickness insurance (voluntary).
The total is 123.24 PLN (including voluntary sickness insurance), up to this amount does not include health premium
(currently 243.39 PLN). Total value of all premiums that have to pay for people starting a business is less than 370
PLN or more than twice less than for other entrepreneurs (890 PLN).
Revenue from photovoltaic installation
1. Electricity sales agreement (ppa)
 obligation to purchase electricity produced from renewable energy sources connected to the grid is on the
seller of office in the territory of the seller (Article 9a paragraph. 6 Energy Law)
 offered duty applies to the total energy produced from renewable energy sources (§ 13 of the Minister of
Economy of 14 August 2008
2. The contract of sale of property rights (cpa)
 obtaining and presenting to extinction of the URE President the certificate of origin or paying a replacement
fee on the electricity traders to end-users (Article 9a paragraph. Energy Law)
 the share of total electrical energy resulting from the certificates of origin and a replacement fee in the total
annual sales – 10.4% in 2011 (§ 3 of the Decree of the Minister of Economy of 14 August 2008).
From 1 January 2010 regulations clearly indicate that a revenue from the sale of certificates of origin is a revenue
from the business activity (previously there were doubts in this respect).
Taxation
 VAT
o
o



Taxation on a general basis (from 2011 — 23%)
In the case of small entrepreneurs the possibility of dismissal if the sale does not exceed 150,000
EUR per year (since 2011)
Excise
o Taxation of the sale of energy to a consignee
o Exemptions for energy from renewable sources of energy (the basis for exemption is a document of
remission of a certificate of origin).
CIT (for partnerships)
o Income taxation on a general basis with the rate of 19% (in 2011)
PIT (in the case of a natural person's business activity)
o Taxation on a general basis, as a business income
o The possibility of choosing to settle the revenue on special terms (a flat tax). On the basis of the act
concerning flat-rate income tax on some revenues earned by natural persons, it is possible to tax
with a flat rate of 5.5% of the revenue from:
sale of certificates of origin received by energy companies engaged in the production of
electrical energy in renewable sources of energy,
sale of generated electricity.
There is an investment tax concession for agricultural taxpayers according to the Act of November 15, 1984 on
th
agricultural tax, Dz U-136, 2006 Regulations. 969 with later amendments — art. 13 . In respect of expenditure on
27/32
the purchase and installation of power generation from renewable energy sources, they can deduct 15 years of
agricultural tax to 25% of investment per year.
Case 1: An owner of a single-family home, unemployed, is realising an investment in a roof-mounted photovoltaic
2
system with peak power of 5 kW (modules with a total area of about 30-70 m , depending on a chosen technology).
The total energy generated by PV system is sold to the grid.
Requirements:
 Establishing a business (on general terms), opening a bank account, proceeding a notification for the Social
Insurance Institution (ZUS) and Tax Office.
 Obtaining a licence for energy production
 Connection to the grid, a purchase/sale contract with an electricity distributor
 Creating an account on the energy exchange.
Balance of costs:
 The Social Insurance Institution discount for new entrepreneurs over 24 months - a total of 367 PLN of
monthly contributions that amounts to 4404 PLN per annum; from 25th month of activity - 890 PLN per
month, i.e. 10 680 PLN per annum.
 The costs of connection, documentation, monitoring equipment (including electricity meter) and costs
associated with the sale of energy on the exchange will be omitted.
 An annual yield of PV system in Poland is around 850 kWh / kWp (this follows from the characteristics of
solar radiation on our latitude and the number of sunny days per year), which for a system with a capacity of
5 kWp equals 3 x 850 = 4250 kWh of energy generated annually
 Assuming that an obtained price (total) is about 460 PLN / MWh (the price consists of two components: an
average price of electrical energy and a charge for the sale of certificates of origin; in 2010, they amounted
to, respectively, 195 PLN and 268 PLN), the revenue is 460 x 4.25 = 1955 PLN per annum
 Flat-rate tax of 5.5% amounts to 64 PLN, so the revenue is about 1110 PLN per annum, assuming a VAT
exemption
 Tax is 5.5% x 1955 PLN = 108 PLN, so the resulting gain is about 1850 PLN per annum
 Assuming that the total cost of installation is around 12 PLN / Wp (3 EUR / Wp) or 12 x 5000 = 60 000 PLN
Generated revenue (1850 PLN net of tax) is less than 50% of the cost of doing business. For a system with a
capacity of 30 kWp the surplus exceeding operating costs and taxes in the first two years would be 6680 PLN, and in
the following only 400 PLN. That means that in the case of small and medium-sized systems there will never be a
return on the investment (despite the fact that the balance does not include the costs of the connection to the grid
and of trading in energy) In consequence, the investment will never return for small and medium-sized systems
(despite the omissions in balance of costs of connection to the grid and trading energy).
4
ADMINISTRATIVE PROCEDURES
Procedure: notification of construction (only systems requiring a notification of construction.)
The notification should be submitted before planned time of commencement of the building works. The works can be
started if a competent organ shall not make an objection within 30 days of the notification submission by way of
decision and not later than 2 years from the commencement date stated in the notification.
Procedure: a geodesic map. (only systems requiring a building permit)
After receiving a decision on building conditions or a notification of conformity with the land development plan, a
geodesic map must be ordered from the geodesic department of the governor's office.
A Construction plan (drafted in four bound copies) must be attached to the application for a building permit. It is
made up of architectural-construction plans and a land development plan for the site and the attachments required
by the authorities (e.g. a geodesic expert opinion or permit for the project from the documentation co-ordination
team). The building plan must be signed by a designer who possesses proper licences and is a member of the
chamber of architects.
28/32
Procedure: a building permit (only systems requiring a building permit)
The application is submitted to the poviat governor. The authority should issue a permit within a month of the
submission of the application but in more complex cases the waiting period may be extended to 65 days from the
day that the application is submitted. In addition, the case may be prolonged if there are gaps in the documentation
and they must be completed.
Legal proceeding: notification of the commencement date, collection of the construction log and the
statement of construction management. (only systems requiring a building permit)
An investor must hire a construction manager and notify a poviat building inspectorate of the planned date of
commencement. The application is submitted (an official form or in the investor's own letter) with an attached written
statement by the construction manager verifying acceptance of the duty of managing works and certificate of
membership to the proper chamber of the trade (the same applies to investment supervision inspector). The poviat
building inspectorate also collects the construction log (it must be stamped); its maintenance is the responsibility of
the construction manager. Work may commence 7 days after filling the application.
Practical Barriers:
1. The law is unclear. Therefore, there may be doubt that only notification is necessary or whether a building
permit is required. In practice the installation of solar collectors is often not reported. According to art. 29
para. 2 item 16 of the building law construction works consisting in the installation of free-standing solar
collectors do not require a building permit. Also, such works are not directly included in the catalogue of
works requiring such a permit. However, such an obligation may follow directly from art. 30 para. 1 item 3
letter b of the building law, which imposes the obligation to notify about the installation of devices higher than
3 m on buildings.
2. work may commence after filing of the notification and a 30-day waiting period. In the case of the absence of
any comments of the office within that period, the notification can be considered accepted. This mechanism
creates a thirty-day waiting period, as the authorities do not inform of the propriety of the notification before
that time.
5
CONDITIONS AND A CONTRACT OF PV SYSTEM CONNECTION TO THE GRID
Procedure: An application for grid connection
The entity applying for connection to the grid, being in possession of legal title to the use of the structure connected
to the grid, must file an application for specifying the conditions for connection. They guarantee that it will be
possible to connect a photovoltaic system to the grid at a specified date. This application must be submitted to the
utility which sends and distributes electrical energy and which has the grid to which a connection will be made. The
application for specifying conditions for connection contains technical information concerning the devices connected
to the system, the annual energy production plan and the potential effect of the system on the grid.
Procedure: signing a contract of connection to the grid
After consultation and approval of the data included in the application a contract of connection to the grid is signed
with the utility. The contract of connection is the basis for the commencement of design, construction and mounting
works in accordance with the rules laid out in this contract.
Practical Barriers:
Since utilities (the grid operators) do not have experience or established procedures adapted to PV systems, they
typically attempt to delay issuing a permit for connecting to the grid. They demand detailed documentation for
installed system, inverters, online monitoring system, etc.
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OBTAINING A LICENCE FOR THE PRODUCTION OF ELECTRICAL ENERGY IN RES
Procedure: Obtaining a promise of licence (optional)
Obtaining a licence to produce electrical energy is a necessary condition for obtaining certificates of origin and for
the production of electrical energy to sell it. One might receive a promise, i. e. the pledge of a licence, before the
completion of installation. During the period of validity of the promise the granting of a licence cannot be denied for
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activity specified in the promise, unless there has been a change in the legal or factual state described in the
application for submitting a promise. The possession of a promise may facilitate securing funds for the planned
investment and is optional. The conditions and procedure for issuing a promise are the same as those for granting a
licence. Although less documentation is required than for a licence since the construction of installation was not
completed. These documents have to be submitted to obtain a licence. The licence itself is issued only after the
construction of the system has been actually completed.
Procedure: Obtaining a licence
An application for issuing a licence is submitted to the Energy Regulatory Office. Entrepreneurs applying for licences
must fulfil the conditions set out in article 33, section 1 of the Act — Energy Law (offices or residence in the EU,
appropriate financial resources, technical capability, employees with appropriate qualifications (art. 54 of Energy
Law) and possession of a decision on construction conditions). As many as 19 (for PV systems) documents and
certificates of various types must be attached, confirming fulfilment of the organizational conditions which ensure the
proper execution of the activity covered by the licence, fulfilment of the technical conditions, and possession of
appropriate financial resources. Among others, to obtain a licence it is necessary to possess a permit for use or a
notification of the termination of construction works filed to the competent building supervision authority and a
contract of connection with a relevant grid operator as well as the protocol of technical check, approval and
acceptance for operation issued by the grid operator.
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THE CONSTRUCTION OF PV SYSTEM
Procedure: the construction of the system
During construction care should be taken to comply with all procedures, construction norms and occupational health
and safety standards. In the case of systems requiring building permits, a construction log must be maintained and a
construction manager must be employed (in practice this function is carried out by an employee of the firm which
installs the system). The construction site might be inspected by an inspector from the poviat building supervision
inspectorate.
Procedure: the notification of the completion of construction
The completion of construction works is reported to the county building inspectorate (an official form or in the
investor's own letter). A statement of compliance of the construction works with the plans and permit by the
construction manager must be attached to the notification, along with the statement of the orderliness of the site, the
construction log, a post-construction geodetic inventory and protocols of the installation of the electrical system.
Practical Barriers:
Highly burdensome legal and administrative procedures (construction log, employment of construction manager,
preparation of safety and health protection plan on a construction site, preparation of post-project documentation of
the structure, preparation of the building for commissioning, etc.) required by construction law (only systems
requiring a building permit)
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CONNECTION TO THE GRID, COMMISSIONING, OPERATION
Procedure: Connection to the grid made by the utility
Utility which is the grid operator is required to carry out the connection of a RES system to its grid.

According to Energy Act of 10 April 1997, Article 7, in the case of devices, installations or networks
connected directly to the grid with nominal voltage higher than 1 kV an expert opinion is drawn up about the
impact of these devices, installations or networks on the grid, except connected generating units with total
installed capacity of not more than 2 MW, or the end-user's devices with a total connection capacity of not
more than 5 MW. Utility engaged in transmission or distribution of electrical energy prepares an expert
opinion.
Procedure: Signing a contract of sale/purchase of energy
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Utility, which is a local company trading in energy, is required to purchase electrical energy generated in renewable
energy sources at an average price of electrical energy on the competitive market in the previous year. This value is
published by URE.
Procedure: The commissioning of a PV system
A grid operator conducts tests and partial and final commissioning depending on needs. The extent of these tests
should be specified on the basis of ―Instructions for Traffic and Use of the Distribution Grid‖ for a given grid operator.
If there is a need to build a new connection, the whole connection process can take up more than 380 days. If the
customer has a terminal connection and technical conditions for connecting are met the process of connection is
shorter.
Procedure: The notification of changes in the system parameters
All changes in the system parameters or equipment used must be reported to the grid operator and URE.
Procedure: Inspections
A grid operator has the right to check equipment connected to the grid, as well as documentation at all times.
Furthermore, the entrepreneur is subject to the same inspections as any other company.
Each installation and electrical equipment should be subjected to periodic checks confirming that the use of the
installation is reliable and safe. The results of the check are the basis for putting the installation to use or extending
its life. The frequency of checks depends on external conditions.
Practical Barriers:
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
Utilities attempt to force the costs of the connection onto the investor (the total cost of the connection is
inflated). It also occurred that they demanded the investor pay the entire cost. Energy Law places an
obligation on utilities to cover 50% of the connection costs for RES under 5 MW.

Regulations of utilities are adapted to connecting large systems, which causes the necessity of providing a
lot of redundant information.
ADMISSION TO RES SUPPORT SCHEME
Procedure: Listing on the Polish Power Exchange (TGE)
It is necessary to open an account on TGE, where certificates of origin will come in. This is connected with the
completion of the form available on TGE website along with numerous attachments.
Procedure: An application for issuing certificates of origin
A licence (for the generation of electrical energy in RES) only authorizes to receive the certificates of origin. Other
additional procedures are necessary to obtain them. The certificates of origin are issued by the President of URE on
the basis of a producer‘s application. The amount of energy produced and reported in the application must be
confirmed by utility. Applications are submitted once a month (or less frequently, but this can result in delays in
issuing certificates) up to the 14th day of the next month. If the application is not submitted until the closing date, the
certificate of origin is not issued. Procedure: Receiving the certificates After the acceptance of the application the
certificates of origin are issued to the indicated account on the Polish Power Exchange (TGE).
Procedure: Trading certificates
An entrepreneur may trade certificates of origin on the Polish Power Exchange (TGE) without limitations. The sale
can take place during exchange sessions or during off-session transactions on the basis of contracts of sale which
were signed earlier. In practice, a producer of energy in renewable energy sources enters into a contract of sale and
certificates with a local company trading in electrical energy, but considering certificates of origin the contract is
fulfilled through TGE.
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Reduction of Bureaucratic Barriers for Successful PV Deployment in the EU
[email protected] • www.pvlegal.eu
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