Portugal: End of Subsidy Programme jeopardizes Market

Now it is official: The Portuguese government will not extend the solar thermal incentive programme, contrary to informal statements made by the responsible authorities since December 2009. Stopping the incentives could jeopardize a sector which has finally made good progress over the last year.

According to the National Solar Association Apisolar, the market more than doubled in 2009, reaching 170,000 m² of newly installed collector area, out of which 90,000 m² were subsidized under the support scheme. Originally, the government had announced a target of 300,000 m² of collector area to be supported by the scheme. The subsidy programme “Medida Solar Térmico” was launched in March 2009 and rebated a solar water heater with EUR 1,641.



The sudden halt really caught the industry by surprise, as the national Ministry of Economy, Innovation and Development had announced in February 2010 that, “the 2009 funds of EUR 95 million were not exhausted and the remaining EUR 50 million would go into the state solar budget for 2010.” Despite the announcement, the ministry declared to discontinue the scheme a month later because of a lack of funds.

The 180-degree turn drew heavy criticism from Apisolar: “The government should know that after such a speedy growth of the market, it is much too early to carry out such a brutal suspension of subsidies in 2010”. The association is afraid that, within a few months, both suppliers and installers will need to end their investments in this market sector, because they will not be able to continue with the large sales and distribution structure they had to build up to fulfil the grant scheme. It is now clear to Apisolar that fulfilling the ambitious targets fixed for the solar thermal sector in the National Renewable Energy Action Plan will no longer be possible.

The association did its own calculation regarding the funds for the subsidy scheme. According to the ministry, 50,100 residential solar thermal systems had been approved under the scheme in 2009, of which 26,000 systems had been installed by the end of last year. Taking the rebate per system of EUR 1,640.73 as a basis for calculation, the approved subsidies add up to EUR 82.5 million. The remaining EUR 12.5 million could have been spent on commercial solar thermal systems for Private Social Solidarity Institutions (IPSS), which were added to the incentive programme in September 2009. Apisolar estimates that the rest of the fund money could still be used for 500 to 700 IPSS installations. According to the ministry, such institutions sent in a total of 1,350 applications, which would mean that almost half of them would not receive any benefits from the programme.

This news was published in the Portuguese magazine Climatização, which publishes news and articles about solar thermal technology, HVAC, energy-efficient buildings, and geothermal on a two-month basis. Solarthermalworld.org has a cooperation agreement with the magazine about sharing international solar thermal news.

More information:

http://www.apisolar.pt

http://www.climatizacao.pt