Finland ministers call for changes to solar energy tax

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The solar energy tax regime has cooled business ardour for producing solar energy. (Jussi Kallioinen / Yle)
The solar energy tax regime has cooled business ardour for producing solar energy. (Jussi Kallioinen / Yle)
Finnish Customs say that current legislation requires small-scale producers of solar energy to pay taxes, even if the power is used only for a household’s domestic consumption.

Environment Minister Ville Niinistö has said he will raise the matter in upcoming government budget negotiations. Finance Minister Antti Rinne also says that if customs officials are right, the law will have to change.

According to an Yle report Monday, Finnish Customs’ interpretation of current legislation on solar energy means that households will have to pay taxes even if solar power is produced solely for their own consumption.

The guidance from Finnish Customs on the taxation issue has eaten into the profitability of large-scale solar panel producers as members of the business sector have switched off solar power because of the tax exposure.

The Salo-based renewable energy company Areva Solar has observed the cooling enthusiasm of businesses for solar energy as a result of the taxation issue. Last winter the company planned a solar panel farm to be situated atop a local business park in response to growing demand for power. Those plans have since been put on ice.

Environment Minister Ville Niinistö told Yle that he intends to raise the matter during budget negotiations due at the end of August.

“Solar energy is becoming increasingly profitable in small-scale production but our outdated taxation practices are making business growth impossible or at least difficult,” Niinistö remarked.

Rinne: Situation “totally absurd”

Finance Minister Antti Rinne’s view on the matter lined up with those of the Environment Minister.

“This must change. In practice it means that if the interpretation of the law in your news is accurate, then it must be changed,” Rinne said in an interview on Yle’s Aamu-tv breakfast programme.

He said that the government had discussed net metering.

“In practice this means that producers could feed power into the (electricity) grid and earn income. Taxes would then be paid only on the income earned,” he explained.

Rinne said he did not expect any opposition to the proposal in the government’s budget discussions.

Related stories from around the North:

Canada: Canada’s Northwest Territories unveils ambitious energy plan, CBC News

Finland: Finland EU’s third largest user of renewable energy, Yle News

Sweden:  Sweden shares top global energy ranking, Radio Sweden

United States:  Ex-commissioner calls for Alaska energy mega-projects analysis, and ‘call bluff’ on North Slope gasline, Alaska Dispatch

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