In recent times, the Polish solar market has experienced significant legislative changes that have both intrigued and concerned investors. The implementation of a price cap has been one of the central discussions within the renewable energy sector. This article aims to explore the recent legislative developments in the Polish solar market, focusing on the price cap, and compare Poland’s solar investment landscape to other Central and Eastern European countries.

One of the most notable legislative changes in the Polish solar market has been the introduction of a price cap. This measure was implemented to regulate the prices of electricity generated from solar installations. The main objective behind the price cap was to protect consumers from potential electricity price fluctuations and to ensure more stable energy costs in the long run.

However, the price cap has been a subject of debate among industry stakeholders. Some argue that it may hinder the growth of the solar sector by potentially reducing investor interest due to capped returns. On the other hand, proponents believe that the measure will increase market predictability and contribute to wider renewable energy adoption.

The European Investment Bank recently firmed up a EUR 400 million financing agreement to support the development and modernisation of the Polish distribution network, to furnish the system with investments through 2025. NICL has approached the operators looking for proactive solutions, including the use of battery storage systems, but we haven’t been successful. The challenge is not at the country level but more a regional level.

The trend seems to be that the Polish PV market has accelerated and grown far quicker than the grid operators expected or have been able to keep up with. According to SolarPower Europe’s end-of-year report, Poland installed 4.9GW of solar PV capacity in 2022, the third highest in Europe after market leaders Germany and Spain.  

SolarPower Europe said in the report that in November 2019 the country had around 2GW of solar installed; November 2022 saw almost 12GW total capacity! 

Hungary has made significant strides in solar energy development in recent years. The Hungarian government has been actively promoting solar investments through incentives, feed-in tariffs, and simplified administrative procedures. As a result, the country has seen a considerable increase in solar capacity installations, attracting both domestic and foreign investors. By the end of 2022, the country had adopted more than 4GW of solar PV, accounting for some 12.5% of the country’s electricity.  In 2023, the country’s Minister of Energy, Csaba Lantos, predicted Hungary’s target for 6GW of PV capacity by 2030 would likely be exceeded by 2x!

The Czech Republic was once a leader in solar energy within the region. However, the government reduced feed-in tariffs drastically in the past, leading to a temporary decline in solar investments. Despite this setback, the country has shown signs of revival with a renewed focus on renewables, offering more stable conditions for potential investors.

Romania boasts a vast solar potential, and its solar market has witnessed steady growth in recent years. The cumulative installed PV capacity grew from 29 MW in 2012 to 1.7 GW in 2022. After positive legal and regulatory changes from 2020 to 2022, the Romanian market has a good chance to add more new solar PV capacity in the next two years, especially under net metering and self-consumption commercial and residential installations. The pipeline of solar PV projects under permitting development is over 16.7 GW as at the beginning of 2023.

The Romanian government provides support through a green certificate scheme, which incentivizes solar power production and attracts investors. However,  issues such as administrative challenges and grid connection uncertainty have hindered development and investment into the sector.

Slovakia has been gradually embracing solar energy. The country offers feed-in tariffs for renewable energy sources, including solar, but the tariffs have been subject to retroactive changes, affecting investor confidence. Nonetheless, the Slovakian solar market is expected to grow steadily with continuous government support.

In comparison to some of its CEE neighbours, Poland’s solar investment landscape remains strong and competitive. As of April 2023, the country boasts 12.7MW of installed capacity of solar PV. And with a growing awareness of climate change and the need to transition towards renewable energy sources, there is an increasing demand for solar power. However, regulatory stability and the government’s commitment to supporting renewables will play a crucial role in determining the sector’s future growth.

The Polish solar market is undergoing a period of transformation, driven by legislative changes, most notably the price cap on solar energy. While the cap aims to provide consumers with more stable electricity prices, its impact on solar investments and industry growth remains a topic of debate. The price cap is due to be phased out at the end of 2023 but there is a sentiment among asset owners that the government may extend the cap by another year, albeit at a higher level. Nonetheless, it presents a strong opportunity for buyers.

To foster a thriving solar market, policymakers must strike a balance between consumer protection and creating an attractive investment climate. By learning from the experiences of neighbouring countries, Poland can capitalize on its solar potential and solidify its position as a leader in renewable energy within the CEE region.