Article written by Eusebiu-Valentin Stamate, public policy expert at Issue Monitoring
The “solar tax” refers to a new tax on the self-consumption of electric energy, meaning the energy produced and consumed by prosumers for their own needs. Government Ordinance OUG 163/2022 allows the Romanian Energy Regulatory Authority (ANRE) to implement this tax for various prosumer categories, including those in the Casa Verde, Electric-Up, or RepowerEU programs, expanding to all categories by 2026. The Romanian government justifies this tax as a requirement to transpose European legislation into national law.
The transposition of the EU Directive 2018/2001
At the end of 2022, the Government issued an ordinance for the transposition of EU Directive 2018/2001 on the promotion of the use of energy from renewable sources into Romanian legislation. This covers a wide range of aspects related to promoting and regulating the use of renewable energy in Romania, including objectives for 2030, the calculation of renewable energy share, joint projects with member and third countries, capacity increases, administrative procedures, granting of permits, notifications for grid connection, guarantees of origin, network access, renewable energy prosumers, and more.
The ordinance amends Law No. 220/2008 and the Electric Energy and Natural Gas Law No. 123/2012
Beyond the directive’s transposition, the ordinance modifies Law No. 220/2008 and the Electric Energy and Natural Gas Law No. 123/2012, including redefining terms like “renewable energy” and introducing a new obligation for end-users regarding transparent contributions to the costs associated with deploying smart metering systems.
It also contemplates the possibility of introducing a new tax on prosumers under certain conditions related to the actual support given to self-produced renewable energy and the characteristics of the installations used, known as the “solar tax,” a measure contested by both the opposition and the business sector.
Article 21 Paragraph 3
Article 21, paragraph 3 of the ordinance allows authorities (the Government, ANRE) to impose taxes and fees on prosumers under certain conditions, such as receiving state funds or exceeding an installed capacity of 30 kW. Another condition requires that the total installed capacity of prosumers exceed 8% of Romania’s total installed capacity starting from 2026.
The Ministry of Energy stated it supports renewable energy production and the increase of prosumers, noting that while generally prosumers don’t pay taxes, the 2018/2001 Directive allows for a tax under specific conditions. The possibility of introducing a tax is postponed until the end of 2026 and depends on meeting several conditions.
The amendment of the ordinance
Although the ordinance took effect at the end of 2022, like any legislative act of its kind, it must be debated and voted on by Parliament. In the Senate, the ordinance’s approval project was tacitly adopted after the debate period expired. Currently, the project is still under debate in the Chamber of Deputies as of February 2023.
On December 19, 2023, the Committee for Industries issued a preliminary acceptance report with approved amendments, modifying Article 21 to clarify aspects related to the Ministry of Energy’s responsibilities, ensuring the accessibility of self-consumption of renewable energy and removing unjustified regulatory barriers. A rejected amendment aimed at completely eliminating the provision. The report now awaits approval or modification by other responsible committees for the final report, specifically the Environmental Committee.
Repeal of Article 21 Paragraph 3
Shortly after the ordinance came into effect, a group of independent deputies initiated a draft bill to repeal Article 21, Paragraph 3. Initially, it received a rejection report but was sent for reconsideration, where it received an acceptance report, confirming the repeal of the article, and then forwarded to the decision-making chamber. Currently, the project is still under debate in the Chamber of Deputies.
Can the Government impose the” solar tax”?
Yes. Starting in 2026, but only if the legislation allows it. According to the legislative journey so far of the two parliamentary projects, one for the ordinance’s approval and the other for the repeal of Article 21, Paragraph 3, there is a very high chance that this provision will be entirely removed by 2026, thus eliminating the possibility of introducing the solar tax. Everything will depend on the provisions that will be approved and voted on by Parliament.
Update: The “Sun Tax” has been repealed, according to art. IV of GEO no. 32/2024.
