Poland: Mixed Review of the first ever residential Subsidy Scheme

After the first six months of the first ever residential rebate and loan programme in Poland, the industry was left with mixed feelings toward its success. On the one side, the sector welcomes the expansion of eligible technologies. Since 17 January 2011, solar combi systems which supply space heating and hot water, too, are eligible for the scheme run by the National Fund for Environmental Protection and Water Management (NFOŚiGW). However, collector manufacturers have criticised some of the regulations which have led to a much lower subsidy rate than was promised. Whereas the NFOŚiGW announced that up to 45 % of the investment costs of the system including installation are covered by the rebate, in reality, this share decreases to 20 to 30 %.

First of all, the grant has to appear on the next income tax declaration. “A well-earner must therefore pay back 32 % of the grant through his or her personal income tax declaration after the first year,” Marek Szymanski, Managing Director of collector manufacturer Watt, explains. Second, the subsidy is only granted in combination with a loan. “Each client must sign a credit with a bank, before he can begin installation,” Bartlomiej Kordek, Technical Advisor at Hewalex (the oldest collector manufacturer in the country), adds. This credit must last a minimum of three months, even if the customer could already pay the solar thermal system in cash. The background of this regulation: The subsidy scheme is administered through six major commercial banks – which want to reap some profits from it as well.

“These extra costs for interests and taxes angered some of the customers, and a few even drew back their demand for a solar water heating system,” Kordek comments. “At least a third of the customers would like to only receive the grant and do not require a credit”. Furthermore, manufacturers are not satisfied with the bureaucratic structure of the subsidy scheme. “All our costumers have to submit the certificates of the components used in the system. It is not possible that the supplier of the system submits all certificates together, in order to facilitate paper work,” Szymanski points out.

These hurdles seem to have already had an effect on the demand for the subsidy scheme. According to the statistics on the website of the Bank Polskiej Spółdzielczości (BPS), the number of applications per month has decreased since the beginning of the year. Whereas 322 applications were approved by BPS in December 2010, the bank paid out only 165 grants this March. BPS is one of six national banks which are in charge of administering the programme, and in total the bank approved 1,326 applications between September 2010 and March 2011. According to the NFOŚiGW’ spokes man, Witold Maziarz, the six banks together received 4,500 applications since the start of the programme and 2,500 of these already received the subsidy from NFOŚiGW.

Number of applications”
Number of applications

After the above-mentioned peak in December 2010, the number of applications approved by Bank Polskiej Spółdzielczości (BPS) has decreased steadily and rapidly. In total the BPS approved 1,326 applications between September 2010 and March 2011.
Source: http://www.ekonews.com

With a planned total budget of PLN 300 million (EUR 75 million), the solar thermal subsidy programme is thought to run until 2014 (find more information in the database of incentive programmes). The banks themselves carry out random checks of about 10 % of the installations. These checks, however, involve only basic indicators, no technical ones, as the banks’ staff has no experience with solar thermal systems.

More information:
Statistic relating to the residential subsidy scheme by the Bank Polskiej Spółdzielczości (BPS) in Polish
Interview with NFOŚiGW’ spokes man, Witold Maziarz (in Polish)

Baerbel Epp

Bärbel Epp is Founder and Director of the German communication and market research agency solrico and editor-in-chief of solarthermalworld.org