PV Austria Fears ‘Massive Uncertainty’ With New Government’s Measures

The Austrian Parliament is to decide the fate of the country’s renewable energy future as it votes on the E-Economy Act or the Renewable Energy Expansion Acceleration Act (EABG). Local solar PV association PV Austria is worried that clearing the act in its present form may lead to increased taxes for the industry. 

The new Austrian government of 3 political parties, headed by Chancellor Christian Stocker, plans to bring back 20% Value Added Tax (VAT) on solar PV systems of up to 35 kW capacity. This will be a premature abolition of the plan that was supposed to last 2 years after it was scrapped on January 1, 2024 (see Another EU Nation To Do Away With Solar VAT). 

Austria’s solar market installed 14% less capacity in 2024, adding 2.5 GW to reach a cumulative of 9.1 GW, according to SolarPower Europe’s EU Market Outlook for Solar Power 2024-2028. It blames the annual decrease on the significant slowdown of the rooftop market, which still remained somewhat insulated thanks to the VAT reduction.  

According to a PV Austria survey, 90% of the companies expect a sudden drop in demand and thousands of jobs to be lost in the small- and medium-sized companies on reintroduction of the VAT.

“The announced early abolition of the VAT exemption for small PV systems has so far caused massive uncertainty in the industry and has permanently shaken trust in politics,” stated the association. 

While the new government sees the ‘savings potential’ for the state treasury with this move, expecting an additional tax revenue of €175 million for 2025, the association disagrees, saying that it will be a maximum of €30 million in savings. Further, it will only strengthen bureaucracy in the market, argues PV Austria.

“The decision to fully tax PV systems again is a breach of trust towards private households and domestic tradesmen who want nothing more than reliability and planning security,” the CEO of PV Austria Herbert Paierl had said earlier. “A solid budget consolidation is undoubtedly important, but a purely revenue-based taxation of small PV systems is a blow to Austria, which is already ailing as a business location.” 

Moreover, the government plans to increase the financial burden on renewable energy plants with a capacity of 1 MW or more, and also introduce an Electricity Industry Transformation Contribution (EWTB) tax which the association refers to as ‘pseudo-tax.’ 

The association points out that these measures are not aligned with the European Commission’s recommendations to lower energy prices in Europe and its member states by reducing taxes. It seems to be referring to the EU’s Affordable Energy Action Plan, which aims to bring down energy prices and costs while speeding up permitting (see EU’s Competitiveness Compass Aims To Secure Clean, Affordable Energy).