Broad Political Support Leads to Agreement on More Solar Energy in Denmark

10 October 2017

The government and the parties behind the energy agreement from 2012 (the Danish People’s Party, the Social Democrats, the Socialist People’s Party, the Danish Social Liberal Party and the Red-Green Alliance) have entered into an agreement to replace the 2017 solar cell subsidy fund that was agreed to by the aforementioned parties in 2013, with a tender on solar cells.

With the 2017 solar cell subsidy fund, it was possible for projects located on privately-owned land to apply for grants in the form of a feed-in tariff of EUR 0.09-0.10 per kWh for solar panel facilities of up to 6 kWh per household. The expected expansion would have resulted in an expansion in capacity of around 20 MW for the cost of approximately EUR 14.1 million.

The previous expansion scheme for solar cells was judged to be expensive and ineffective. Therefore, the government has proposed to reorganize the scheme so that the same amount of EUR 14.1 million is allocated via a tender process, where solar cell projects of up to 1 MW can apply for grants.

The agreement is expected to result in a total expansion of solar cell capacity of 35 MW instead of 20 MW. The large solar cell panels in the proposed 35 MW expansion are more efficient, and since the tender simultaneously secures low support rates, it is expected to produce twice as much green energy for the money invested.

-I am pleased that there is support among the parties to design the energy policy in a way that optimizes the production of green energy. The government’s proposal to move from a subsidy fund to a tender with competition can result in twice as much sustainable energy for the same amount of money. We think that this is a smart and logical solution, and we expect to see bids for solar cell projects that combined will be able to supply 12,500 households with green energy annually, says Minister for Energy, Utilities and Climate Lars Chr. Lilleholt.

The solar cell tender is subject to approval by the European Commission.

Facts:

Facilities smaller than 1 MW are eligible to apply to the solar cell tender.
Support is granted in the form of a fixed price supplement on top of the electricity price for 20 years.
The budget will be EUR 14.1 million annually.
If the tender is approved, it will commence in 2018.

Source: Ministry of Energy, Utilities and Climate