Solar power is booming in the Netherlands. In the past years the number of Photovoltaics power (“Solar PV”) has increased tremendously. The Statistics Netherlands has estimated that the total amount of Solar PV has increased from 90 Mw in 2010 to 1048 Mw in 2014. It is expected that the amount of Solar PV will continue to grow rapidly in the coming years.
In September 2013 more than 40 Dutch organizations have signed the Agreement on Energy for Sustainable Growth. This agreement marked the start of a transition to a sustainable future in the Netherlands. The agreement aims to increase the proportion of energy generated from renewable sources from 4.4% in 2013 to 14% in 2020 and 16% in 2023. The Dutch government has implemented a variety of measures in order to meet these sustainability goals.
Despite the advancing technological developments, renewable energy is still more expensive than fossil energy. Various measures are therefore required to expedite the introduction of renewable energy solutions. In this article the most important measures will be discussed which the Dutch government has taken in order to expedite the implementation of Solar PV in the Netherlands.
Solar cells, also called PV, convert sunlight directly into electricity and can be installed on rooftops or can be ground based. Investing in Solar PV has become increasingly more interesting in the Netherlands. The costs of Solar PV have dropped in the past years and the installation of PV installations has become user-friendlier. However, this is not the main reason why the amount of Solar PV has increased rapidly in the past years in the Netherlands. The growing investments in Solar PV power are mainly due to a number of measures taken by the Dutch government and are expected to continue growing in the coming years.
In the Netherlands the main support instrument for Solar PV power is the so-called SDE+ scheme. The SDE+ scheme is a premium feed-in scheme, which provides producers of renewable energy financial compensation for the production of energy. The production of Solar PV is usually more expensive than the production of fossil energy. The difference between the cost price of fossil energy and Solar PV is the so-called unprofitable component. The SDE+ scheme compensates producers of renewable energy for the unprofitable component for a period of 15 years. The amount of SDE subsidy is dependent upon the development of the cost price of fossil energy. A high fossil energy price implies a low SDE+ subsidy, whereas a low fossil energy price implies that the renewable energy producer will receive a higher compensation from the buyer.
In spring 2016 the budget for the SDE+ scheme is EUR 4 billion. The SDE+ scheme encompasses a system of phased admission with escalating base tariffs, which favors low cost renewable energy options. The primary target groups for SDE+ subsidies are companies, institutions and non-profit organizations. Only projects connected to a large-scale energy connection (> 3*80 Amp) are eligible to the SDE+ subsidy. Energy producers with a small energy connection (< 3*80 Amp) may consider acquiring a large-scale energy connection in order to be eligible for the SDE+ subsidy. However, the costs for acquiring a large-scale energy connection can be considerable.
Net-metering is particularly interesting for small-scale energy projects in the Netherlands, in particular for residential housing. Small-scale energy projects entail Solar PV producers with a small-scale energy connection (3*80 Amp). Net-metering is the physical compensation of Solar PV production during a period of time and basically means that the electricity meter turns backward when produced Solar PV energy is supplied to the grid. The renewable energy can be fed in to the grid and withdrawn from the energy consumption. The amount of energy which can be fed in to the grid cannot be higher than the amount of energy consumed from the grid. For small-scale renewable energy producers, energy taxes only apply to the net electricity consumption. The net energy consumption is the difference between the electricity obtained from and fed-in to the grid.
Following the principle of non-discrimination, the access to supply solar energy to the grid must be granted to small-scale energy suppliers. Grid operators are generally obliged to develop the grid to provide sufficient capacity for the access and transmission of electricity.
A different legal regime is applicable to energy producers with a large-scale energy connection (> 3*80 Amp). Contrary to projects with a small-scale energy connection, projects with a large-scale energy connection do not have the statutory right to feed energy to the grid. Large Solar PV projects can supply energy to the grid but need to negotiate a contract with an energy supplier. Renewable energy producers with a large-scale connection fall within a less restrictive legal regime. A more restrictive legal regime is only applicable to small-scale energy suppliers.
Tax benefits for collective production of renewable energy
Besides the SDE+ scheme and net-metering, investments in Solar PV are supported via loans and various tax benefits in the Netherlands. One of the most interesting tax benefits is provided in the scheme reduced tariff for collective production of renewable energy (“Verlaagd tarief voor collectieve opwek”). This scheme provides associations of owners and cooperative associations the possibility to jointly produce renewable energy with certain tax benefits. Participants of this collective scheme jointly invest in a renewable energy installation. It is required that all participants are resident in a postal code area close to the energy installation. The jointly produced energy is subsequently being sold to an energy supplier. The energy sold to the energy supplier is credited to the energy bill of the participants to the scheme. It must be clear what share each participant has in the renewable energy installation in order to correctly benefit from this tax advantage.
Solar energy is booming in the Netherlands. The increasing investments in Solar PV installations in the Netherlands are mainly due to the measures taken by the Dutch government. In this article the SDE+ Scheme, net-metering and the scheme reduced tariff for collective production of renewably energy have been discussed. All three measures have made a contribution to the current growth in Solar PV in the Netherlands. Although the growing investments in Solar PV are a very positive development, the Netherlands still lags behind the sustainability goals. In 2014 the proportion of energy generated from renewable sources was only around 5,5%. This proportion must be 14% in the 2020. The measures taken by the Dutch government and the required investments in order to meet the 2020 goals make the Netherlands a very interesting opportunity to invest in Solar PV.