The Swedish government is considering reducing the subsidy for solar installations and abolishing the tax break for households and companies that produce sustainable electricity on a small scale. Svensk Solenergi, Sweden’s largest solar association, has criticized the proposals.
The Swedish Ministry of Finance plans to reduce the subsidy rate for solar installations to 15%. It also plans to scrap the tax reduction for micro-production of renewable electricity.
The ministry said in a statement on the government website that installations have increased significantly and that there is therefore no longer a need to subsidize solar cells.
“Solar energy should be built to a greater extent on market-based foundations, and price signals from the electricity market should have a greater impact, so that in the long term energy generation can contribute more to Sweden’s security of supply, in line with the long-term direction of energy policy,” the report said.
The proposals are part of the autumn budget of the Ministry of Finance, which was presented to the cabinet on September 19. If agreement is reached, the reduced subsidy for solar cells would come into effect on July 1, 2025, while the abolition of the micro-energy production tax reduction would take place in early 2026.
The ministry said the policy changes will help increase tax revenues by up to 880 million SEK ($86.7 million) in 2026.
Svensk Solenergi, the main association of the Swedish solar industry, said it is “very critical” of the proposals. “The support systems the government is attacking are and have been important for accelerating the electrification of households and small businesses,” it added in a statement.
The Swedish government has increased its subsidy for solar cell installations from 15% to 20% in January 2023. Svensk Solenergi said the “jerky nature” of changing energy policies is once again “creating bad conditions” for PV companies.
“Support systems must be long-lasting and predictable,” said Anna Werner, CEO of Svensk Solenergi. “The constant changing of subsidy levels creates uncertainty and discourages both homeowners and companies from investing in sustainable electricity production.”
The income tax reduction for households and companies producing renewable energy on a micro-production basis was introduced in 2015, with a maximum of SEK 18,000 per year. Deductions can be made up to the number of kilowatt hours that a prosumer purchases. Svensk Solenergi said it is a cheap way to increase local electricity production.
“It promotes the expansion of small-scale electricity production, which increases the self-sufficiency of Swedes,” said Werner. “This makes the entire country less vulnerable in the event of future energy crises.”
Statistics show that Sweden deployed 460 MW of solar energy in the first half of this year. The results point to a slowdown in the national solar energy market, after a record 1.6 GW of PV capacity was deployed in 2023.
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