Czech Republic: Key judgment by Prague Municipal Court on “commencement of operation” of photovoltaic power plants


The State Energy Inspectorate recently imposed over 30 fines on various operators of photovoltaic energy installations because these installations were put into operation later than the operator declared. The fines were mainly imposed on photovoltaic power plants built during the “solar boom” in the Czech Republic (2009-2010).

The date on which the photovoltaic power plant commenced operation is important because starting from commencement, the operator is entitled to state aid for renewable energy. In the years of the solar boom, the amount of state aid provided to photovoltaic power plants was higher than in the years that followed, making photovoltaic energy an attractive business opportunity. Operators that gave a false date of commencement will not only face a fine from the State Energy Inspectorate, but will also receive a significantly lower amount of state aid.

The State Energy Inspectorate stated that an installation is put into operation as soon as an electricity meter is installed, according to Price Decision No. 4/2009.[1] By installing the electricity meter, the operator not only generates electricity but can also supply it to the distribution grid, and such a supply of energy must be quantifiable.

However, the Energy Regulatory Office, which issued Price Decision No. 4/2009, also issued an explanatory opinion stating that the decisive date was the later of either the effective date of the licence to generate electricity or the date on which the photovoltaic power plant was connected to the grid.

The issue arose after the State Energy Inspectorate discovered during its inspections that electricity meters had been installed later than the decisive date according to the explanatory opinion of the Energy Regulatory Office. This occurred at several photovoltaic power plants due to the low capacity of regional grid operators, which were unable to provide electricity meters in a timely manner.

In its recent ruling, Prague Municipal Court agreed with the State Energy Inspectorate on the date of commencement of operation of a photovoltaic power plant. It ruled that the operator of a photovoltaic plant may be entitled to state aid only after installation of an electricity meter. This ruling will not only affect other proceedings in similar matters, but may lead to the Czech Republic being deemed liable for maladministration. The judgment has not yet come into force. The participant may also lodge a complaint with the Supreme Administrative Court.

[1] Price Decision No. 4/2009 was in force during the decisive time period for the installation concerned by the Prague Municipal Court judgment.