Experts criticize Hungary’s new environmental tax on solar panels

January 14, 2015


From this year owners of solar panels in Hungary must pay an environmental protection tax averaging HUF 2500 (USD 10) per module.  According to the tax which was approved by parliament in December as part of a “salad law” on various environmental issues, solar panels belong to the category of materials causing serious environmental pollution.

Director Ada Ámon of Energia Klub (Energy Club), an NGO, has told ATV that with this decision the government of Hungary has sent the message that there is no place for renewable energy in Hungary.

Ninety-five percent of solar panels can be recycled, a process requiring a significant energy investment, Ámon said. Since 2012 there has been a directive for the recycling of these devices, which should apply to Hungary as well.  EU member states are to ensure that electronic waste is recycled and disposed of in an appropriate manner.

So Hungary should resolve the recycling but this is not the same as imposing taxes, according to Ámon. She said this directive also provides a variety of options from which  the Hungarian government has selected the one that generates revenue for the state, albeit only a few hundred million forints.  However, because it is a tax, it discourages the very thing the government should be seeking to encourage from the point of view of sustainability and energy security.  Also a big question is whether it is possible to monitor whether the money is actually devoted to recycling, the Energy Club director said.

According to Ámon, in other EU member countries, manufacturers have solved this problem by opening more than 200 recycling points across Europe. She pointed out that because solar panels can be reused in the production of new panels, it is in the interest of suppliers and distributors to help in their collection.  “It is high time to create a similar system in Hungary, especially considering the product life expectancy of solar panels being installed nowadays is 20-30 years.”

With this decision the government had declared a war on the renewable energy industry even though by 2030, 27 percent of total energy consumption should come from renewable sources.  Currently, in Hungary this is below 10 percent, according to Ámon.

There are two kinds of energy policy. One going back to the 1950s that requires the construction of large power plants in a country, and if electricity is needed somewhere, then the relevant one turns on.  The other is that a number of smaller electricity producers should coordinate their activities so as to provide the right amount of electricity to be delivered at the right time.   Since 2001 Germany has pursued the latter, whereas the European Union chose the former, said Ámon.

In the long run it certainly would not be more expensive than the “traditional way”. The Energy Club director’s not-for-profit organization is currently preparing a study that will prove the Hungarian power grid is capable of operating without nuclear upgrade Paks 2 in the future, with renewable energy playing a major role in this, namely solar panels and wind energy.

“If we look around Europe we see that neighboring Slovakia already has more than 500 megawatts of solar capacity, while Hungary has only 22 megawatts, even though Hungary’s climatic conditions are more favorable than Slovakia’s.” Austria has 600 megawatts, Belgium 3000 and Germany 35,000.

This is where energy efficiency comes into play because it is not enough to make more renewable power, Ámon said. Power consumption must be reduced.  In this way it would be possible for local sources of energy to power individual homes in the future.

The cost of using and producing renewable energy continued to decrease. Ámon said figures issued to date by the government about Paks 2’s future prices and rate of return are not serious, adding that it is not possible to know what energy costs will be in the future.  Most experts say Hungary should wait 5-8 years with this investment to see which way the market moves. We are a in a post-crisis period, which does not favor any technological advancement, so it might be worthwhile to wait in the interest of making a good decision.

Even the government’s own people oppose the decision

According to Zoltán Illés, who was environmental undersecretary during the second Orbán government from 2010, renewable energy is everywhere regarded as a means of climbing out of the economic crisis.  For this reason, if the government regards environmental protection as an obstruction, the result will be to hinder economic growth.

Illés, who is the chairman of Fidesz’s 6th district, believes Hungary should counteract the dangers of nuclear energy and the uncertain future of fossil fuels with renewable energy.  Instead, policy goes against every trend that is seen in the world, says the former undersecretary.

According to him, the protection of environment and nature have practically completely disappeared from the government structure.  The field of expertise has no representation in the government, thus this penalty on solar panels was able to go through without hindrance.

Illés, who opposed expanding the Paks nuclear power plant, was not a candidate for public office on the Fidesz ticket in 2014.