PVTIME – The Austrian Parliament is set to pass the Erneuerbaren-Ausbau-Beschleunigungs-Gesetzes (EABG, Renewables Expansion Acceleration Act) proposed by the new government. If passed, it will have a significant impact on the renewable energy industry in terms of taxation and therefore the deployment of clean energy, according to PV Austria, the local PV industry association.
Picture: PV Austria
The legislation includes the reintroduction of VAT on small-scale photovoltaic systems. The government plans to reintroduce a 20% VAT on PV systems of 35kW and below, whereas the previous government had planned to introduce a two-year VAT exemption from 1 January 2024. The government also plans to further tighten the energy crisis contribution for electricity, placing an even greater financial burden on renewable energy systems with a capacity above 1MW, and to introduce a new levy called the Electricity Industry Transformation Contribution.
The association noted that the planned package contradicts recent recommendations by the European Commission to reduce energy prices across Europe and its member states.
In 2024, new PV installations in Austria were around 2.5GW, down 14% year-on-year, with a cumulative total of 9.1GW, with the slowdown in the rooftop PV market being the main reason for the decline, while the VAT relief policy was cushioning the impact of the downturn to some extent.
According to a survey cited by PV Austria, 90% of solar companies expect a drop in demand as a result of the measures, with SMEs facing operational difficulties and possibly even layoffs affecting thousands of people.
PV Austria warned that the government’s planned announcement of an early abolition of the VAT exemption for small-scale photovoltaic systems has caused great uncertainty in the industry and seriously undermined the market’s confidence in the policy.
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