Norway Considering Tax Exemption For RE

Norwegian Finance Ministry Opens Consultation For Electricity Tax Exemption For Renewables, Including Extension To On-Grid Solar

Norway Considering Tax Exemption For RE

Norway’s proposal for electricity tax exemption for renewable energy systems of up to 500 kW has been proposed to be covered under state aid. (Illustrative Photo; Photo Credit: Tsetso Photo/

  • Norway has solicited feedback on its proposal to provide electricity tax exemption to renewable energy generation
  • Renewable energy systems, including solar, are proposed to be exempted from paying grid rent, VAT and electricity tax
  • It applies to systems of up to 500 kW per property that generate and consume electricity on the same premises

The Ministry of Finance in Norway has opened a public consultation for its proposal to exempt electricity generated by renewable energy sources from paying electricity tax, to make it easy for housing companies to use electricity produced by solar systems with state aid.

Electricity produced by solar systems is already exempted from the tax, but only for projects not grid connected. The government says this rule makes it difficult for housing companies as housing associations to make use of the exemption.

According to the draft being consulted, the government wants to exempt housing companies using solar power from paying grid rent, value added tax (VAT) and electricity tax. Hence, they can be grid connected prosumers but won’t have to pay taxes.

The consultation also proposes to implement the exemption from Excise Duty Regulations for renewable energy systems including solar, water or wind. It will cover systems with a total installed capacity of up to 500 kW per property, generating and consuming electricity on the same premises. It is in addition to the current exemption for solar power, it added.

“It is important to make it more attractive to invest in the use of renewable energy from sun, water and wind. We will do what we can to bring more power into the Norwegian market,” said the country’s Finance Minister Trygve Slagsvold Vedum. “I hope this proposal can be what makes more housing companies want to invest in solar cells in the future.”

As per the ministry, the above stated proposals in the electricity tax are closely linked to proposals under the Ministry of Petroleum and Energy for a new model for sharing renewable power production, which is also under consultation.

Last date for submissions is September 30, 2022. Details can be accessed on the website of the Directorate of Taxes or Skatteetaten through which the ministry has launched the consultation.  

Norway’s electricity production is 100% renewable, according to Eurostat that says in 2020 it produced more electricity from renewables than its total electricity consumption (see EU Renewable Energy Share 37% In 2020).   

At the end of 2021, Norway’s total renewable energy capacity was 39.76 GW, according to the International Renewable Energy Agency (IRENA) but solar PV’s contribution was only around 225 MW, while it is  largely based on hydropower with more than 34.8 GW.

However, the country is looking at solar for its affordability and diverse applicability since hydropower plants are capital intensive to build comparatively. Rooftop solar is a good bet for Norway as it encourages people to produce their own electricity thereby reducing the need for land to place large scale ground mounted solar power plants and also lowers the pressure on the grid.

About The Author

Anu Bhambhani

SENIOR NEWS EDITOR Anu is our solar news whirlwind. At TaiyangNews, she covers everything that is of importance in the world of solar power. In the past 9 years that she has been associated with TaiyangNews, she has covered over thousands of stories, and analysis pieces on markets, technology, financials, and more on a daily basis. She also hosts TaiyangNews Conferences and Webinars. Prior to joining TaiyangNews, Anu reported on sustainability, management, and education for leading print dailies in India. [email protected]

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