The Eastern European country is expected to see between 300 and 400 MW of PV capacity deployed this year. This growth will be primarily driven by the FIT program, which closed in mid-2016. Net metered PV installations up to 50 kW represent another key market driver, while C&I projects between 50 kW to 500 kW have ground to a halt.
The Hungarian solar market is on track to see record growth this year, with up to 400 MW of new capacity expected, according to president of the Hungarian Photovoltaic Industry Association (MANAP), Ádám Szolnoki.
In an interview with pv magazine, Szolnoki explains that this year’s growth will be mainly driven by large-scale solar projects developed under the FIT scheme (KÁT), which expired in mid-2016. Overall, these projects are expected to contribute between 200 MW and 300 MW of capacity, while net metered projects under 50 kW, will provide around another 100 MW.
The country’s cumulative installed PV capacity stood at around 310 MW, as of the end of December 2017. This means, if the forecast growth volumes are confirmed by official statistics, total installed PV power in the country may surpass 700 MW, or even reach 800 MW, by the end of this year.
Expired FIT scheme
While the KÁT FIT scheme expired in 2016, the deadlines by which projects may be developed, have been extended to 2020 across several stages, says Szolnoki. This is allowing developers to take advantage of a huge pipeline of projects approved under the scheme – in April 2017 their combined capacity was around 2 GW – which is now progressively coming online.
Szolnoki estimates, however, that just 40% to 70% of these projects will actually see the light of day, before the new deadlines expire. One of the main issues is a lack of qualified installers available to complete the approved projects in such a short period of time.
The Hungarian government granted the first one-year grace period to all PV projects approved under the FIT scheme at the end of 2017. The extension of this, and the following deadlines, however, resulted in the length of the support period being reduced for projects connected with delay beyond 2017.
If the aforementioned numbers are confirmed by official figures, net metering for PV installations up to 50 kW in size could account for almost half of the cumulative PV capacity expected to be reached by the end of this year.
Net metered PV installations are being supported by a five-year subsidized loan program for renewable energy and energy efficiency projects, but this program is not the segment’s main driver, according to Szolnoki, as PV is only one of the many different types of projects supported under the scheme.
Although residential and commercial PV installations under 50 KW have enjoyed robust development over the past three years, the same cannot be said for commercial and industrial (C&I) projects with a capacity of 50 to 500 kW.
Indeed, since the Hungarian government decided to unexpectedly terminate the FITs for these projects this May, the segment has ground to a halt. “We don’t know at the moment if and when these FITs may be reinstated,” Szolnoki says. On the top of this, at the time, the government gave companies planning small-scale power plants just five days to submit their applications.
Premium tariffs failing
Another segment that could provide further growth, but is currently still unattractive to investors, is renewable projects with a capacity between 500 kW and 1 MW. Although these projects are entitled to receive a so-called administrative premium on top of the market price, this premium tariff is still not attractive enough for potential investors, according to Szolnoki. “The mechanism itself is working well, but the level of this incentive seems not to be enough for spurring more growth,” he says.
No auctions in sight
The current program for Hungary’s renewable energy – the Metár program – includes, in theory, an auction mechanism for large-scale renewable energy projects exceeding 1 MW. According to Szolnoki, however, the recently established government has not said yet when, or even if, auctions will be launched, nor it has provided details on how the auction scheme would be implemented.
It is unknown, for example, if solar will have to compete with wind in mixed auctions, as suggested by the EU. Currently, wind is not being considered by the Hungarian administration as an option for its future energy system. The EU, however, approved the scheme in July 2017.
But auctions are not the only missing piece in the Hungarian renewable energy landscape. A 300 MW solar program for farmers announced by the government in January is still under development. “The government said it is working on it, exactly as it does for the auction scheme,” Szolnoki concludes.
Source PV Magazine