In January 2013, the Serbian parliament adopted a set of rules related to production of energy from renewable sources, setting forth the conditions for obtaining the status of a privileged producer and temporary privileged producer of renewable energy. It also introduced a range of incentives in relation to such producers.

Under the Decree on Conditions and Proceedings of Acquiring the Status of a Privileged Producer of Electricity (the “Decree”), the status of privileged producer may be granted to legal entities and entrepreneurs which are electricity producers in the following main types of power plants: hydroelectric power plants with an installed capacity up to 30 MW, as well as biomass, biogas, wind, waste, solar and geothermal power plants.

The total maximum installed capacity of solar power plants in relation to which an investor may acquire the status of temporary privileged producer and/or privileged producer is limited to 10 MW for the entire territory of Serbia, of which:

  • 2 MW is reserved for power plants using solar power on separatepower units of up to 30 kW;
  • 2 MW is reserved for power plants using solar power on separate power units from 30 kW to 500 kW; and
  • 6 MW is reserved for power plants using solar power on the ground.

According to the Decree, due to changes in investment costs of solar power plants, the maximum installed capacity for such power plants is to be (re)determined each year.

With respect to wind power plants, the total maximum installed capacity is limited throughout Serbia to 500 MW for the purposes of acquiring the status of temporary privileged producer. The same limit applies to acquiring the status of privileged producer until the end of 2020.

In order to benefit from these incentives, a privileged producer must enter into a PPA with a public supplier for all energy to be produced during the incentive period. Temporary privileged producers may conclude a preliminary PPA.

In July 2013, the Ministry of Mining and Energy adopted a Rulebook on Establishing the Standard PPA and Preliminary PPA, which sets forth the terms and conditions for PPAs and preliminary PPAs. The parties may deviate from the prescribed model with the Ministry’s written consent.