According to the Flemish government's energy plans for 2020, and as confirmed by the Flemish Minister for Energy, the Flemish government aims to increase the solar energy production in Flanders by 30% by 2020 in order to meet the renewable energy targets. This goal can only be achieved if 6.4 million new solar panels are installed. Expecting a new “rush” on solar panels, we have taken a closer look at a number of recent updates in the legislative and regulatory framework that apply to solar energy installations.
Different types of grids
The electric grid in Flanders consists of different components. First, there is the regular Flemish distribution grid for electricity to which the majority of households and SMEs are connected. The Flemish distribution grid is operated by (subsidiaries of) Eandis and Infrax, which are the only recognized distribution grid operators by the VREG, the Flemish Electricity and Gas Regulator. Almost all small solar energy installations for households and SMEs (typically ≤10 kVA) in Flanders are connected to the Flemish distribution grid.
Secondly, there is a high voltage (federal) transmission grid, which is operated by Elia, for the whole federal territory of Belgium, including Flanders. The transmission grid is used for high voltage electricity transmission, and the import/export of electricity. The transmission grid is regulated by the Federal Electricity and Gas Regulator (CREG). The large-scale solar panel installations which cannot be connected to the Flemish distribution grid, will be connected to the (federal) transmission grid.
Besides the above-mentioned types of grids, there are also (closed) local distribution grids, or direct lines, for which the VREG/CREG delivers a permit and which is being operated by a VREG-recognized grid operator. The closed distribution grids can be connected either to the distribution grid or the transmission grid. Solar energy installations cannot be connected to alternative private distribution grids which are not recognized by the VREG, as, in principle, such unpermitted private distribution grids are forbidden pursuant to the Flemish Energy Decree of 8 May 2009.
Connecting to the grid
The legal framework and grid operators make a distinction between solar energy installations with a power output of ≤10 kVA, >10 kVA and more powerful installations. Before connecting installations to the grid, they must comply with the administrative and technical connection requirements of the grid to which they will be connected.
If a large-scale solar energy installation is to be connected to Elia’s transmission grid, the candidate producer of solar energy should first submit an application to Elia (via application forms), which will investigate the application and technical specifications of the installation. Elia will then provide an ‘access contract’ to the candidate producer, which stipulates the rights and obligations to connect to the transmission grid. A candidate producer can connect to the transmission grid through existing access points or request a connection through new access points, which Elia has to approve.
The procedure that has to be followed to connect solar energy installations to the distribution grid depends on the power output of the installation. If the solar panels have an output >10 kVA, then the candidate producer should submit an application to Eandis/Infrax. The latter will then perform a grid study of the installation to check whether or not the installation can be connected to the distribution grid. If the result is positive, Eandis/Infrax will provide an access contract and the solar panels can be installed and connected to the grid. Solar panels with an output of >10 kVA should also be notified to the VREG, in order to receive green power (or renewable energy) certificates (“groenestroomcertificaten”).
There have been some recent changes for solar panels which have an output ≤10kVA, which we describe under the next section.
Installations ≤10 kVA: Distribution grid operators taking over tasks from the Flemish Electricity and Gas Regulator (VREG)
As from 23 November 2016, the Flemish distribution grid operators (Eandis/Infrax) have become the unique point of contact for matters and questions related to solar panels ≤10kVA. Before this date, a producer of solar energy had to submit two (data) applications, both to the VREG and to Eandis/Infrax: the latter had to be informed about the technical aspects of the solar panel installation while the VREG had to be informed about the energy production of the solar panels for the allocation of green power certificates. Such certificates were then not paid by the VREG but by Eandis/Infrax. This administrative practice was seen as too burdensome.
Since 23 November 2016, Eandis and Infrax now provide an online portal allowing owners of solar panels to submit, through one application, the notification of (i) the installation of solar panels ≤10kVA, and (ii) their energy production reports and data, which will make it easier to request green power certificates. New solar panel installations, changes and alterations, registrations of installations and production counters all have to be done using the new online portal. The new portal can also be used to file complaints and meter readings and data can be consulted there. The centralization of most communication and data for solar panels should make the administration more efficient and easier.
The VREG will still be the competent authority to grant the green power certificates (of which the value is calculated by the Flemish Energy Agency), but this will be done behind the scene. From now on, the VREG will be able to focus more on its core business: regulating, monitoring and ensuring transparency in the electricity and gas markets, which still also includes controlling the solar energy market.
Green power certificates and other subsidies/incentives
Producers of solar energy installations can receive an additional compensation for the electricity that is produced by their solar panels; such subsidy is structured as green power certificates. The Flemish government has reformed this subsidy, so that only the existing solar energy installations (above or below 10 kVA) and new solar energy installations with a power of minimum 10 kVA can benefit from the certificate system. Also, certificates of origin are awarded for each 1,000kWh of electricity that is being produced by solar panels, with such certificates being the proof that the electricity is green/renewable. Both the green power certificates and certificates of origin can either be sold or traded to third parties at market price. The legislation provides that the green power certificates can be sold at a minimum price to the grid operators.
Producers installing solar panel installations with a power of minimum 750 kVA can additionally apply for a ‘project specific technology subsidy’ at the Flemish Energy Agency.
In addition, an investment deduction under Belgian income tax could be obtained (“verhoogde investeringsaftrek”), increasing the attractiveness of the installation of solar panels as an investment.
Other administrative permits
According to the Flemish Executive Order of 16 July 2010 (last update: 15 July 2016), solar panels installed on a flat roof, built with a maximum height up to 1 meter above the roof and solar panels built into a sloping roof, do not require a building permit; other types of installations which do not meet the aforementioned conditions, still require a building permit. Also, Article 4.4.9 of the Flemish Urban Planning Code (“Vlaamse Codex Ruimtelijke Ordening”) provides an exception regime, allowing for the obtainment of a building permit for solar energy installations which are planned into zoning areas where the zoning regulations do not directly allow solar panels. In the latter situation, the authorities delivering a building permit are still, in any event, obligated to investigate the impact of solar energy installations on the direct environment. When a building permit is lacking such appreciation, it can be annulled (according to the jurisprudence of the Council of Permit Disputes: RvVb A/1516/0001 of 8 September 2015, RvVb A/2014/0507 of 29 July 2014 and RvVb 2013/0469 of 13 August 2013).
Besides a building permit, an environmental permit could be required for solar energy installations. As from 23 February 2017, these two permit regimes will be merged into the integrated environmental permit (“omgevingsvergunning”), leading to a more simplified permitting procedure for installations that must be permitted from both a building and environmental perspective.
Right to build
Companies interested in building solar energy installations, but struggling to build such installations on their own limited available (roof) space, can always attempt to negotiate a right to build (“opstalrecht”) with a third party, and install and own (for a maximum period of 50 years) their solar panels on such third party’s roof or land.
Some recent clarifications in the Right to Build Act (“Opstalwet”) provide more legal certainty for parties opting for a right to build. Since 15 April 2014, the Right to Build Act stipulates that a right to build does no longer require a direct connection with the land. A right to build can henceforth, without discussion, be based on a third party’s building/roof.
Also, the scope of application for granting a right to build has been expanded. Now, according to the revised Right to Build Act, not only land owners (“grondeigenaars”), but also a holder of a limited type of real property right (such as usufruct (“vruchtgebruik”), land lease (“erfpacht”) and right to build (“opstalrecht”)) can grant a right to build for the installation and ownership (for maximum 50 years) of solar panels.
To be closely monitored
In order to achieve the EU, national (federal) and regional targets for renewable energy, the Flemish authorities have created a more favorable legal regime for solar energy in Flanders and have just recently announced that they will develop a more favorable legal regime for wind energy in Flanders as well, which we will address in a next briefing. As we have noticed in the past, the (revised) legislative framework for renewable energy and the implementation thereof could be subject to further revisions, so updates in such legislative and regulatory framework should be monitored closely by interested parties.