Last week, Croatian Prime Minister Andrej Plenkovic announced that, in order to encourage electricity generation from renewable sources, the state will abolish VAT on investments in solar energy.
However, zero VAT is only related to solar panels, which account to about a third of the total investment in solar power plant construction, with other costs include inverters, the construction on the mountings, installation, trial operation and project documentation.
The Croatia RES Association welcomes the measure, but note that it still not clear when it will take effect, adding that its adoption came too late and that the reduction of VAT should be applied for all components, not just solar panels.
Currently, the share of solar energy in Croatia’s electricity consumption is less than 1 %. The Association argues that the state should help small and medium enterprises to install solar power plants using extra-budgetary funds, like those collected by electricity transmission operator HROTE or the Fund for energy efficiency. This will enable the installation of 300 MW in small-scale solar power plants (up to 500 kW), which is three times more than currently installed.
