Research RES LEGAL Support system Country: Luxembourg. 1. Overview of support system

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1 Research RES LEGAL Support system Country: Luxembourg 1. Overview of support system Overview of support system Support schemes Promoted technologies Statutory provisions In Luxembourg, electricity from renewable sources is promoted through a price regulation system based on a feed-in tariff. Furthermore, renewable energy systems are supported through subsidies. Private individuals operating small solar systems are entitled to tax benefits. Price regulation. Electricity generated from renewable energy is promoted through a feed-in tariff. The operators of renewable energy systems are entitled against the grid operator to the conclusion of a contract on the purchase of the electricity they produce. Subsidies. The installation of solar systems in private households is incentivised by investment grants. Companies may also receive grants for investments in renewable electricity generation. Tax regulation mechanisms. Income from photovoltaic systems generating 1 to 4 kwp is exempt from income tax. In Luxembourg, the feed-in tariff applies to electricity generated from any source of renewable energy except for geothermal energy. Investment grants apply to electricity generated from any renewable energy source, while grants for private households and tax benefits promote solar energy only. Loi du (Loi du 18 février 2010 Act of 18 February 2010) RGD (Règlement instituant un régime d'aides pour la promotion de l'utilisation rationnelle de l'énergie et la mise en valeur des énergies renouvelables.- Regulation establishing a support system for efficient energy use and renewable energy) RGD (Règlement relatif à la production d électricité basée sur les sources d énergie renouvelables Regulation on the generation of electricity based on renewable energy sources) Circulaire du (Circulaire du directeur des contributions L.I.R. n 14/2 du 23 mai 2003 Circular of the financial authority L.I.R. No. 14/2 of 23 May 2003) 1

2 2. Basic information on legal sources Name of legal source (original language) Name of legal source (full name) Name of legal source (English) Abbreviated form Entry into force Loi du 18 février 2010 relative à un régime d'aides à la protection de l'environnement et à l'utilisation rationnelle des ressources naturelles. Act of 18 February 2010 establishing a support system for environmental protection and efficient energy use Règlement grand-ducal du 20 avril 2009 instituant un régime d'aides pour la promotion de l'utilisation rationnelle de l'énergie et la mise en valeur des énergies renouvelables. Grand-Ducal Regulation of 20 April 2009 establishing a support system for efficient energy use and renewable energy Loi du 18/02/2010 RGD 20/04/2009 RGD 08/02/ /04/ /01/2008 Règlement grand-ducal du 8 février 2008 relatif à la production d électricité basée sur les sources d énergie renouvelables Grand-Ducal Regulation of 8 February 2008 on the generation of electricity based on renewable energy sources Last amended on Future amendments Purpose Relevance for renewable energy Link to full text of legal source (original language) Link to full text of legal source (English) Detailed provisions on the support schemes for environmental protection and energy efficiency. This Act applies to renewable electricity generation (Art. 8). ves/2010/0044/a044.pdf#page=2 Promoting energy-saving measures and renewable energy, especially photovoltaic systems. This regulation is a set of rules for subsidies for the use of renewable energy by private individuals, non-profit organisations, private and public real estate developers (except for the state). 009/0083/a083.pdf#page=2 Promoting the use of renewable energy, especially through a feed-in tariff. This regulation promotes renewable energy only. islation/reglements/2008/02/energies.pdf 2

3 Name of legal source (original language) Name of legal source (full name) Name of legal source (English) Abbreviated form Entry into force Circulaire du directeur des contributions L.I.R. n 14/2 du 23 mai 2003 Circular of the financial authority L.I.R. No. 14/2 of 23 May 2003 Circulaire du /05/2003 Last amended on Future amendments Purpose Relevance for renewable energy Link to full text of legal source (original language) Link to full text of legal source (English) Promoting photovoltaic systems The circular is based on the Income Tax Act of 4 December 1967 and promotes renewable energy only. slation/legi03/circulaire_du_23_mai_ 2003.pdf 3

4 3. Further information Institution (name) Website Name of contact person Telephone number (optional) (optional) (head office) Ministère de l Economie et du info(at)eco.public.lu Commerce extérieur - Ministry of Economics and Foreign Trade Agence de l Energie S.A. Energy agency info (at) energieagence.lu Enovos Luxembourg S.A. fonds nova naturstroum Investment fund

5 4. Support schemes 4.1. Subsidy I (Regime d aides pour la promotion de l utilisation rationelle de l énergie et la mise en valeur des énergies renouvelables) Abbreviated form of legal source(s) Country-specific support system RGD 20/04/2009 Private individuals, non-profit organisations and private or public real estate developers (except for the state) installing PV systems with a maximum capacity of up to 30 kwp are subsidised by the state, which awards investment grants up to a certain maximum. Only projects implemented within the territory of the Grand Duchy of Luxembourg are eligible (Art. 1 RGD 20/04/2009). The subsidy scheme is based on agreements. Entitlement arises when a subsidy is awarded by the Minister of Environment (Art. 1 (2) RGD 20/04/2009). General information Only solar energy is eligible for subsidies. Wind energy Eligible (Article 8 RGD 20/04/2009). Promoted technologies Solar energy Systems generating less than 30 kwp (Art. 8 RGD 20/04/2009) Amount Beneficiaries The subsidy amounts to 30% of the installation costs, subject to a maximum of 1,650 per kwp (Art. 8 RGD 20/04/2009). The following expenses are eligible: PV modules, mounting system, wiring, inverter, electrical protection devices, meter and installation costs. This scheme applies to private individuals, non-profit organisations and public or private real estate developers (except for the state) (Art. 1 RGD 20/04/2009). The obligated party is the Ministry of Environment (Art. 1 RGD 20/04/2009). Applications for grants shall be submitted to the competent Ministry between 01/01/2008 and 31/12/2012 (Art. 17 RGD ). Competent authority "Administration of the Environment" (Administration de l environnement, Art 16 RGD 20/04/2009) Flexibility Mechanism 5

6 State The subsidy scheme is funded by the state. The funds are provided from the budget of the Ministry responsible for energy policy (Art. 8 RGD 20/04/2009). Consumers Funding System operator Grid operator Distribution mechanism 4.2. Subsidy II (Régime d aide à la protection de l environnement et à l utilisation rationnelle des ressources naturelles) Abbreviated form of legal source(s) Country-specific support system Promoted technologies Amount Beneficiaries Loi du 18/02/2010 Companies investing in renewable electricity generation are eligible for investment grants. Only projects implemented within the territory of the Grand Duchy of Luxembourg are eligible (Art. 3 Loi du 18/02/2010). The subsidy scheme is based on agreements. Entitlement arises when a subsidy is awarded by the Ministers of Economy and Finance (Art. 1 Loi du 18/02/2010). General information All renewable electricity generation technologies are eligible. Wind energy Eligible (Art. 2 u) Loi du 18/02/2010). Solar energy Eligible (Art. 2 u) Loi du 18/02/2010). Eligible (Art. 2 u) Loi du 18/02/2010). Eligible (Art. 2 u) Loi du 18/02/2010). Eligible (Art. 2 u) Loi du 18/02/2010). Eligible (Art. 2 u) Loi du 18/02/2010). Grants may cover up to 45% of the additional costs arising from the use of renewable energy as compared to nonrenewable sources. The grant may increase by 20 percentage points for small enterprises and by 10 percentage points for medium-sized enterprises (Art. 8 Loi du 18/02/2010). This scheme applies to enterprises (Art. 3 Loi du 18/02/2010). The obligated parties are the Ministries in charge of economy and finance (Art. 1 Loi du 18/02/2010). Applications shall be submitted to the Ministry of Economy before the investment is made (Art. 11 Loi du 18/02/2010). Art. 11 contains a list of the required documents. Subsidies are awarded by joint decision of the Ministries of Economy and Finance. 6

7 Competent authority Ministry of Economy (Art. 11 Loi du 18/02/2010). Flexibility Mechanism State The subsidy scheme is funded by the state. The funds are provided from the budget of the Ministries of Economy and Finance (Art. 1 Loi du 18/02/2010). Consumers Funding System operator Grid operator Distribution mechanism 7

8 4.3. Loan (Name of support scheme) Abbreviated form of legal source(s) Country-specific support system Promoted technologies General information Wind energy Solar energy Amount Beneficiaries Competent authority Flexibility Mechanism State Consumers Funding Grid operator System operator Distribution mechanism 8

9 4.4. Feed-in tariff (name of scheme) Abbreviated form of legal source(s) Country-specific support system RGD 08/02/2008 In Luxembourg, electricity from renewable sources is promoted through a price regulation system based on a feed-in tariff. All renewable electricity generation technologies are eligible, except for geothermal energy (Art. 4 RGD 08/02/2008). The amount of feed-in tariff differs for the various technologies and depends on the system size. The feedin tariff is guaranteed for a period of 15 years. Only systems within the territory of the Grand Duchy of Luxembourg are eligible (Art. 1 RGD 08/02/2008). All renewable electricity generation technologies except for geothermal energy are eligible under the following conditions: General information In general, systems shall be commissioned on or after 01/01/2008. Only systems commissioned after 1 st January 2008 are eligible for the tariff (Art. 6 (1) RGD 08/02/2008). Special regulations for biogas systems. systems are eligible only if they were commissioned after 1st January 2007 and renewed or extended thereafter to increase their output by at least 20% (Art. 6 (2) RGD 08/02/2008). Wind energy Eligible (Article 7 RGD 08/02/2008). Eligible under the following condition: Promoted technologies Solar energy Systems shall generate less than 1 MWp (Art. 8 (2) RGD 08/02/2008). Eligible under the following condition: Systems shall generate less than 2,500 kw (Art. 10 RGD 08/02/2008). Eligible under the following condition: Systems shall generate less than 5 MW (Art. 12 RGD 08/02/2008). Eligible under the following condition: Systems shall generate less than 6 MW (Art. 9 RGD 08/02/2008). 9

10 Amount Degression Cap Eligibility period Beneficiaries General information The amont of tariff varies for every technology (Art RGD 08/02/2008). Wind energy 8.27 ct per kwh (Art. 7 RGD 08/02/2008) Solar energy 37.0 ct 42.0 ct per kwh (according to system size, Art. 8 RGD 08/02/2008) 12.0 ct 15.0 ct per kwh (according to system size, Art. 10 RGD 08/02/2008) : 12.5 ct 14.5 ct per kwh (according to system size, Art. 12 RGD 08/02/2008) Wood waste: 11.0 ct 13.0 ct per kwh (according to system size, Art. 13 RGD 08/02/2008) 8.5 ct ct per kwh (according to system size, Art. 9 RGD 08/02/2008) The tariff decreases over time: The tariff for new systems depends on the source of energy and the year of commissioning and decreases according to a General information percentage set by law (Art. 7-12, RGD 08/02/2008). The tariff in force in the year of commissioning is applicable during the entire eligibility period. Wind energy Solar energy The tariff is guaranteed for a period of 15 years, starting on the day of the first electricity export. Renewed or extended biogas stations are entitled to 20 years of feed-in tariff (Art. 6 (4)-(5) RGD 08/02/2008). The persons eligible are the operators of renewable energy systems (Art. 5 (6) RGD 08/02/2008). The person obligated is the grid operator (Art. 5 (5) RGD 08/02/2008). The operator of a given energy system and the grid operator conclude an agreement. This agreement shall be based on a model contract and approved by the regulatory authority (Art. 5 (5) RGD 08/02/2008). Competent authority Flexibility Mechanism Funding State 10

11 Consumers Grid operator The costs of the feed-in tariff are borne by the final consumers. Gelöscht System operator Distribution mechanism 11

12 4.5. Premium tariff (name of support scheme) Abbreviated form of legal source(s) Country-specific support system Promoted technologies Amount Degression Cap General information Wind energy Solar energy General information Wind energy Solar energy General information Wind energy Solar energy Eligibility period Beneficiaries Competent authority 12

13 Flexibility Mechanism State Consumers Funding Grid operator System operator Distribution mechanism 13

14 4.4. Quota system (name of support scheme) Abbreviated form of legal source(s) Country-specific support system Promoted technologies General information Wind energy Solar energy Amount of quota and period of application Adjustment of quotas Amount Number of certificates according to technology Minimum price per certificate Fees and penalty charges International certificate trade International applicability Flexibility Mechanism Beneficiaries Funding Competent authority State 14

15 Consumers Grid operator System operator Distribution mechanism 15

16 4.5. Tax regulation mechanisms (name of support scheme) Abbreviated form of legal source(s) Country-specific support system Promoted technologies Circulaire du Income from the sale of electricity generated by photovoltaic systems with a capacity of 1-4 kwp is exempt from income tax, as the sale of photovoltaic electricity is not deemed a commercial activity. Only systems within the territory of the Grand Duchy of Luxembourg are promoted. General information Only electricity generated from solar energy is eligible. Wind energy Solar energy Systems generating 1 to 4 kwp are eligible (par circulaire du ). Amount ( X ) statutory basis Beneficiaries Entitlement to the tax benefit is based on the circular of the financial authority and the Income Tax Act of 4 December Entitled party The persons entitled are the operators of photovoltaic systems (par Circulaire du ). Obligated The obligated party is the financial authority (par Circulaire du ). party Income from the sale of electricity generated by small photovoltaic systems is deemed noncommercial. For this reason, it is not subject to tax. However, investments in such a system are deemed private investments and are thus not tax-deductible (par Circulaire du ). Competent authority Flexibility Mechanism Funding State Consumers This incentive is funded by the state, which receives lower revenue due to the tax reduction. Grid operator 16

17 System operator Distribution mechanism 17

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