Financing will be available, but a number of obstacles still stop household investments in RES

A list of necessary changes to make it easier for a novice investor in renewables to become a family consumer and producer of electricity

Climate / Analysis / Interview
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Raya Lecheva

Whatever financial instruments there are for investments in Renewable Energy Sources (RES), the real barriers to households are still a fact, and in order to remove them, in addition to the will, a working parliament that passes laws is needed.

A number of administrative obstacles stop people from taking such an important step, Iliyan Iliev from the Public Center for Environment and Sustainable Development, Varna, is also convinced. He shared this at an online event "Should the Law on Energy from Renewable Sources and the Energy Law be changed to make it easier for households to become producers of energy that they feed into the grid?", organized by Habitat Bulgaria.

The non-governmental sector proposes to introduce opportunities for producers of energy for their own needs, to be able to use the energy network as a "battery" for storing excess energy for them, as this process is administratively simplified as much as possible. This includes the introduction of the concept of "consumer-producer" - prosumers - from English "prosumer" = producer + consumer. Another important change in the two laws is the introduction of "net metering" - accounting for the difference between the electricity produced by the respective energy facilities of the consumer - producer and the electricity consumed by him for his own needs on an annual basis. This will enable the energy that is produced in excess to be used elsewhere. If, for example, in the summer you live in a house where your photovoltaic system is located and you produce in excess, this energy should be calculated and used for the period when you already move to the city in the winter.

The easiest calculation that Iliev makes is related to the fact that if 100,000 households build 1kW of power each, they will produce as much energy as a nuclear reactor. He is one of those enthusiasts who are starting to make photovoltaics for their own needs, and this testing led him to the idea of ​​also making a checklist for easy installation of photovoltaic plants for their own needs. According to him, first of all, we should not formalize the implementation of the European legislation, because in most cases it relieves the big producers.

In the attached document you can see all of Iliev's construction of his small 1kW plant, which is sufficient for his own energy.

The construction of photovoltaics for one's own needs should go to notification mode

It is very important that the families who make photovoltaics for their own needs go to notification mode, and the electricity distribution company will just have to connect the user to the system. Currently, anyone who installs a photovoltaic system is treated as a producer, and this is associated with more difficult and slow administrative procedures that can take about a year. That is why we need to introduce the concept of consumer-producer, comments Iliev. According to him, it is important that there is no limit to the installation of a specific power, be it 5 Mw or 10 Mw, but that it is as much as the household needs, which further explains the need for Net metering. If the household sells electricity, it is normal to comply with the legislation and pay taxes, but it should not be provided additionally, as is the obligation at the moment, said Iliev. According to him, the checklist should also stipulate that the companies that will be engaged in the construction of photovoltaics must be licensed.

Households to be producers and consumers, to manage the energy they have with Net metering

And in America, experience shows that these companies are also intermediaries between the owner and the administration and perform all the procedures instead of the owner. The convenience is that he simply says, "I want to build a photovoltaic system," and everything else is done by the company that will build the system. Currently, reporting and documentation take too much time with unnecessary red tape. One of them is, for example, the need to pay 35 cents each for two invoices, which are expensive to pay online because of the bank fees, but they cannot be deducted from the next bill, so as not to rush a person on the spot. Iliev explained that the photovoltaic system of the house is 4kW, of which he uses half. "During the day, not all systems work, I have done energy management, the boiler is connected to a collector, the system powers 2 freezers, refrigerators, TV, computers, I cannot use all the current. If an air conditioner were installed, it would draw this amount of electricity," added Iliev. The profit depends on the electricity purchase prices. But with all the administrative obstacles and time, the amount is insignificant.

123 million euros for single-family and multi-family buildings under the Recovery Plan

And serious financial resources are provided under the Recovery and Sustainability Plan. Project 9 is the Program for the rehabilitation of multi-family residential buildings is worth 765 million euros. Nearly 77% of the planned funds will be used again for a 100% grant to households, regardless of their income. The remaining part is planned to provide an 80% grant, and 20% will be own financing, for which an ESCO scheme is planned. But it comes with mandatory reforms, changes to the Condominium Management Act and the creation of a definition of energy poverty in the Energy Act, as well as a one stop shop where people will get advice to deal with administrative hurdles . 123 million euros are provided under project 10 Program for financing single measures for energy from renewable sources in single-family buildings and multi-family buildings. The first measure is to build solar systems for domestic hot water supply. The maximum amount of non-reimbursed financing for an individual household is planned to be 100% of the value of the system, but not more than BGN 1,960.83.

Small RES plants up to 10 kW are an opportunity for families to receive up to BGN 15,000 in support

The second measure is for the construction of photovoltaic systems up to 10 kW. The maximum amount of the grant for an individual household is planned to be up to 70% of the value of the system, but not more than BGN 15,000.

Energy-poor households will be able to apply for free financing of up to 100% of the value of the system, but no more than BGN 15,000.

If it is technically possible to use batteries, households can include them in the photovoltaic system project, as long as the threshold of BGN 15,000 is not exceeded.

Households can install photovoltaic installations with a power exceeding 10 kW and a value of BGN 15,000, but grant funding is limited to BGN 15,000.

But these investments are linked to a mandatory reform to stimulate the production of electricity from RES. And therefore it is imperative to reduce the administrative burden for investments in renewable sources in terms of the installation, connection and operation of the capacities. It is planned to create a working group and public consultations for changes in the Law on RES, etc. regulations.

The energy efficiency funds will be among the first to be released from the autumn after MPs passed changes to the European Structural and Investment Funds Management Act last week. Thus, the first tranche of BGN 2.6 billion from the funds under the Recovery Plan will not be lost. However, if we want the next tranches to be transferred by the end of the year, a number of laws must be adopted to unblock investments, including for the rehabilitation and construction of RES by households.

What are the important EU laws and targets for energy efficiency and RES?

The European Climate Pact was adopted in June 2021. According to him, countries must reduce greenhouse gas emissions by at least 55% by 2030. and to achieve climate neutrality by 2050. In order to achieve the set goals, the EC has started a review of its legislation within the framework of the so-called "Fit for 55 package". Buildings are key to achieving the targets, as they are responsible for 40% of energy use and 36% of associated greenhouse gas emissions. A revision of the RES Promotion Directive has started to make it easier to integrate energy from renewable sources into the grid. A new target was set for 40% renewable energy in the energy mix and 49% renewable energy use in buildings. The current Renewable Energy Promotion Directive has not yet been transposed into Bulgarian legislation, the deadline for which was June 30, 2021, Habitat Bulgaria, organizers of the conference, recalled.

Households still face huge administrative obstacles to produce energy from RES for their own needs. The path for modernization of the energy sector, as well as the end date for the use of coal, has not yet been defined, commented Asya Dobrudjalieva, project manager at Habitat Bulgaria.

And because of the Russian invasion of Ukraine in May 2022. The EC presented the REPowerEU plan, which aims to end the EU's dependence on Russian fossil fuels and overcome the climate change crisis. This also includes changes to the Recovery and Resilience Facility to incorporate specific new measures into Member States' existing recovery and resilience plans. The Commission proposes that buildings be energy-efficient - they are the fastest and cheapest way to deal with the current energy crisis and to reduce bills. Member States are encouraged to use fiscal measures to promote energy savings, such as reduced VAT rates for energy efficient heating installations, building insulation and appliances and products.

The Commission is proposing to increase the 2030 headline target for renewables from 40% to 45% under the Ready for Target 55 package. Setting this overall increased ambition will create a framework for other initiatives, including a dedicated EU solar strategy to double solar PV capacity by 2025 and to install 600 GW of capacity by 2030. The Commission proposes the Solar Roofs initiative to phase in a legal obligation to install solar panels on new public and commercial buildings and new residential buildings.

Plans are to double the level of deployment of heat pumps and measures to integrate geothermal and solar thermal energy into modernized district and municipal heating systems.

Many reforms are needed to be able to effectively use European funds and to attract additional investments from citizens, funds and banking instruments. The household sector is characterized by high energy intensity, as 93% of the building stock in the country does not meet the requirements for energy efficiency. 90% of non-renovated buildings are characterized by the worst energy performance - with energy consumption classes E, F and G. Therefore, many steps are needed, including legislative ones, in order to first improve the energy efficiency of our homes and, in parallel, to support energy independence by building RES.

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