Foreign solar investors prepare lawsuit against Czech Republic over subsidy reductions

Three foreign solar energy firms, Ener, Voltaic Network, and Photon Energy Group, are preparing to sue the Czech Republic over proposed subsidy changes for renewable energy sources. According to statements from the companies’ legal representatives, the planned adjustments, which would lower state support, could violate contractual obligations and disrupt the legitimate expectations of foreign investors. The firms contend that the subsidy reduction would undermine long-standing commitments made to attract foreign investment into the renewable energy sector.

The Czech government’s proposed subsidy budget for renewable energy in 2025 is set at 8.5 billion CZK—substantially lower than the original 31.2 billion CZK outlined by the Ministry of Industry and Trade under existing rules. The government’s adjustments include a proposal to evaluate the profitability of solar power plants commissioned between 2009 and 2010 and could reduce the yield percentage for plants built from 2006 to 2012 from 8.4% to 6.3%, in line with EU guidelines.

Industry voices, including the Czech Solar Association, have raised concerns that these reductions could endanger half of the country’s solar power output and lead some operators to financial collapse. The Solar Association also claims that the proposed changes contain errors and conflict with Czech law.

The three solar companies have formally notified both the Czech government and President Petr Pavel that the proposed cuts could breach international agreements. This notice is regarded as a preliminary step towards launching international arbitration proceedings, where the investors may seek compensation for potential damages resulting from reduced subsidy levels.

Finance Minister Zbyněk Stanjura expressed confidence that the changes adhere to both Czech and European law, adding that the government is merely enforcing stricter compliance measures. The subsidy adjustments, which are part of an amendment to the national budget legislation, are currently under parliamentary review.

The affected companies have significant investments in Czech solar assets: Austrian firm Enery holds 92 MW of solar capacity after acquiring assets from the China-CEE Fund and Green Horizon Renewables; Photon Energy operates plants with a total capacity of 129.7 MW across multiple European countries, including the Czech Republic; and Germany’s Voltaic Network owns and operates a 4.64 MW photovoltaic facility in Rybníček, built in 2010.

This legal action underscores the mounting tensions between the Czech government’s fiscal policies and the renewable energy sector’s calls for regulatory stability. As parliamentary debate over the proposed subsidy changes continues, the case could become a landmark in the Czech Republic’s approach to managing foreign investments in clean energy.

Source: CTK