EU Solar Energy Strategy

PV= Foto Voltaic*

With the EU Solar Energy Strategy published on 18 May 2022, the European Commission plans to quickly launch large-scale solar power deployment and rebuild Europe's solar power generation industry. In this way, the EU aims to achieve its Greendeal targets and to get rid of dependency on Russian fossil fuels as soon as possible. The EU is considering economic growth and creating employment in new business lines while delivering sustainable and independent green energy to the citizens of its member states at a lower cost. The three main objectives of the strategy, which have been officially announced, are as follows:

1. To identify the obstacles to the use of solar energy,
2. Suggesting methods to accelerate the spread of solar energy,
3. Making EU solar systems more competitive and flexible

The 40% renewable energy resource percentage targeted to be achieved in 2030 has also been renewed as 45% in this context. Thus, the EU's primary energy source will be renewable energy, and solar energy will meet half of it. In order to achieve these lofty goals, licensing and permit processes will be completed much faster. The EU is asking member states to establish renewable energy special zones so that these permits can be granted faster. 320GW of photovoltaic power is targeted across Europe by 2025 and 600GW by 2030. In order to do this, it is aimed to reduce the costs of solar energy systems. Systems whose production costs have fallen 82% in the past decade are desired to be even more accessible. In the short term, 4 main methods/initiatives are focused on in order to get the maximum efficiency from solar energy:

1. European Solar Rooftops Initiative: Rapid and large-scale photovoltaic deployment will take place.
2. Simpler and Faster Permits: During the legalization phase of the solar energy strategy, the EU Commission will publish legislative proposals, additional articles, recommendations and guides, especially on this subject.
3. EU Large-Scale Skills Partnership: Job opportunities will be created within the scope of the Pact of Skills and REPowerEU plan for the qualified workforce to work within the scope of these initiatives across the EU.
4. European Solar PV Industry Alliance: Innovations in the field of solar energy will be supported and especially the photovoltaic generation sector will be strengthened.

Thanks to all these developments, photovoltaic systems will be used instead of natural gas in homes and workplaces for heating and electricity needs across Europe. However, this would require the EU to install an average of 45GW of systems per year and triple the solar power used for heating.

Energy Efficiency Target to be Increased

The Commission proposes the development of long-term energy efficiency measures, including increasing the binding Energy Efficiency Target from 9% to 13%. Member states are also encouraged to use fiscal measures to promote energy savings, such as lowering VAT rates on energy-efficient heating systems, building insulation, appliances and products. In this context, the following targets stand out for increasing renewable energy:

• The Solar Rooftops Initiative, which has a progressive legal mandate to install solar panels on new public and commercial buildings and new residential buildings.
• Measures for doubling the use of heat pumps and integrating geothermal and solar energy into modernized district and communal heating systems.
• A commission proposal to tackle slow and complex permitting processes in renewable energy projects, and a targeted amendment to the Renewable Energy Directive to recognize renewable energy as a priority public interest.
• Planning 10 million tons of domestic renewable hydrogen production and 10 million tons of hydrogen imports by 2030 to replace natural gas, coal and oil in hard-to-decarbonize industries and transportation sectors.

European Solar Rooftops Initiative

According to estimates, the EU can meet 25% of its energy needs with photovoltaic panels to be installed on the roofs of houses, workplaces and common areas. In order to achieve this goal, the European Commission took some definite decisions and determined a roadmap. According to this;

• The rate of renewable energy use in 2030 will be 45%.
• In particular, the permits to be given to large-scale roof panels will be completed in a maximum of 3 months.
• The readiness of all buildings for solar energy will be checked.
• All new public buildings and workplaces larger than 250m2 will have to install solar panels on their roofs by 2026, all existing public buildings and workplaces larger than 250m2 by 2027 and all new residences by 2029.
• People in need will be given the electricity obtained from public buildings so that they can benefit from solar energy, or financial aid will be given to install panels.
• A renewable energy community will be established in every municipality with a population of more than 10,000.
• It will be ensured that the new buildings to be built will be of almost "zero energy" standard in accordance with the Energy Performance of Buildings Directive and current provisions.
• All member states will establish infrastructure systems (energy storage systems, heat pumps, etc.) that can pay for themselves in 10 years for roof systems. Resources and investments will be created to establish the infrastructure.

Financing the Strategy

By 2027, an additional 26 billion Euros will be invested in photovaltaic systems in the EU. Most of the funding will come from the private sector. However, there will also be public support, some from the EU. The Recovery and Resilience Facility project, which was established within the EU to improve the economic and social effects of the coronavirus epidemic, has already allocated 19 million Euros for its green energy strategy.

Other funds that will finance the strategy include The Cohesion Policy Funds, InvestEU, Innovation Fund, Modernization Fund, Horizon Europe and the LIFE Program Fund. It has not yet been determined how much resources will be transferred to these funds, and under what conditions and to whom support will be given.

In addition, within the scope of RES (Renewable Energy Resources Tool), cooperation with non-EU countries in solar energy projects will also be supported.

Faster Permissions and Special Regions

Permission procedures will be simplified and accelerated by establishing special zones. The envisaged target is that the permit period for the installation of solar energy systems on roofs and other structures in these special regions does not exceed 3 months. While places such as old industrial areas and mining sites are primarily targeted, it is planned to provide support for the systems to be installed in these places with funds such as the Modernization Fund and the Just Transition Fund.

Within the scope of special zones, it is stated that agricultural lands and stagnant water basins can be converted into solar power plants. The primary purpose is for the land owners to generate their own electricity with the established facilities in order to carry out their industrial, agricultural etc. activities and to be independent in this sense. In addition, it is aimed to use every idle environment with solar energy production as much as possible and to bring it into green energy. For example, covering the sound barriers installed next to motorways with solar panels throughout the Netherlands is discussed. If this plan is realized, the electricity of 250,000 households will be produced thanks to these panels. However, for all panels to be placed, compliance with current legislation must be ensured first.

Labor Force

Under the strategy, the number of 357,000 full-time employees working in the solar sector in Europe is expected to double. However, there is not such a skilled workforce in the EU. For this reason, training institutes and training programs for the sector will be created. In addition, all member states will share the list of qualified employees and their contact information with other member states to ensure the free movement of their workforce.

Incentive for Small Producers

As part of the strategy plan, it is aimed to ensure the independence of citizens in energy, and incentives are foreseen for small producers who use their own electricity. Investment subsidies, tariff guarantees, exemptions from certain taxes, the possibility of selling excess electricity to other consumers or directly in the market are a few of them.

State aid will be granted for small projects with an installed capacity of 1 MW or less, and exemption from mandatory tender processes will be provided. In addition, thanks to the Energy Taxation Directive, which was revised in 2021, member states may not tax solar electricity under certain conditions in the current situation.

It is generally legal in the EU for a small producer to produce the electricity they need and sell the surplus on the market. However, although there is no legal obstacle, this practice is not common in Europe yet.

EU - Solar PV Industry Alliance

With the EU - Solar PV Industry Alliance, it is aimed to prevent possible problems in the supply of basic materials. Currently, the purchase of solar panels as the final product or the supply of raw materials used in solar panel production from non-European countries poses a great risk for this strategy. Thanks to the alliance, information and material flow will be ensured between countries, manufacturers and suppliers. Within the scope of the EU, it is planned to reduce the risks that may be encountered in the supply chain, especially with the following programs:

InvestEU: The European Investment Bank and other public institutions will be able to create risk-reduced financing for private investments.

The Innovation Fund: Innovative, zero and low carbon production tools and equipment such as solar panels and components will be able to gain a competitive advantage.

Recovery And Resilience And Cohesion Policy: Projects that benefit local development will be supported.

The strategy for which the roadmap has been drawn does not yet have a legal provision. Although there is no law proposal passed by the European Commission, it is aimed to make legal arrangements and to start implementing the strategy quickly in the coming period.

Att. Cansu Yılmaz | Corporate Lawyer