“The government’s proposal risks the collapse of the solar cell market”

DEBATE

In a situation when the solar cell market is already having a tough time, the government’s proposal will hit hard, writes Maria Röske, 100% Renewable.

That new technology may need help to establish itself on the market is nothing strange, and solar energy is no exception. But the government seems to think so.

Despite the fact that the market for solar cells is expected to halve this year, the government proposes that the current tax reduction of 60 öre/kWh for micro-produced solar cell electricity be removed from 1 January 2026.

Micro-production refers to facilities that have a maximum output of 43.5 kW. It is therefore something that mainly affects smaller investments, for example solar cells on house roofs. As early as 2025, the government also wants to lower the tax reduction for the installation of new solar cells for villa owners from 20 to 15 percent.

The proposals come in a sensitive situation for the solar cell market, where many companies are struggling, with several bankruptcies as a result. With pending government proposals, the market risks collapsing. All the knowledge that has been built up, all the companies that have been created and the jobs that have been generated would go to waste. It would be a huge waste of resources from previously invested tax funds, while companies are being wiped out, many thousands of people lose their jobs and we miss out on new fossil-free electricity production.

The two deteriorated conditions for solar cells are estimated to be worth SEK 880 million. As reasons for the changes, the government states that there is no “need to, to the same extent as in recent years, stimulate the demand for solar cells” and that “solar power should to a greater extent be built on market-based foundations”. These quotes show that the government has not familiarized itself with the market situation for solar power in Sweden, which is irresponsible considering the consequences it entails.

Listen to industry experts and let the subsidies be phased out at a predictable pace adapted to market developments. Making a proper assessment of how long a new technology needs support is a difficult task, and undoubtedly the government has not done sufficient market analyses.

But what is even clearer is that to the extent that from a political point of view individual technical solutions are to be supported in order to push for long-term sustainable development, it is better to design it as investment support. It should not take place in the form of a guaranteed future subsidy for sales, as the proposal for new nuclear power is formulated.

That the government talks about market-based principles in terms of energy policy is hypocritical, when the government’s investigators have presented a proposal for a massive tax subsidy for new nuclear power. What you do in practice is to give very extensive subsidies to one type of power, while at the same time reducing a comparatively marginal support to another.

Sweden also imposes an energy tax on solar cell installations of over 500 kW for self-produced and self-used electricity, which prevents the expansion of large rooftop installations well suited for solar power production.

Sweden is the only country that has made this narrow interpretation of the EU’s state aid rules, where most countries have no limit at all. This further demonstrates the hypocrisy of the government’s talk of “technology neutrality” and “market fundamentals”.

Solar cells definitely have a future place in a fully market economy energy system. The government’s own investigator, however, has shown that nuclear power does not have it, but must be subsidized by taxpayers for all time.

Ulf Kristersson and the government must now explain why extensive and permanent subsidies to one type of energy are prioritized over temporary and small subsidies to support another type of energy that has the conditions to be economically profitable in the near future.

Maria Röskechairman 100% Renewable