The Solar Future NL questions incentive arrangement "postcoderoos"

AMSTERDAM/ROTTERDAM – The actions by which the government wants to encourage citizens to start local cooperatives for solar energy - the so-called postcoderoos - are so complex and restrictive that they just block sustainable initiatives. Citizens who want to install solar panels on other roofs are faced with high connection fees, taxes and bureaucratic burdens.

This is stated by Dutch experts who will be speaking at the conference The Solar Future NL, which will be hosted by Solarplaza on May 27 in the Beurs van Berlage in Amsterdam. In the Lower House, the ChristenUnie has asked questions to Minister for Economic Affairs Kamp and State Secretary for Finance Wiebes about the strict tax regime for cooperatives.

In the energy agreement for sustainable growth concluded in September 2013, it was agreed that citizens who want to generate solar energy in cooperatives or owners associations, would receive a tax credit of 7.5 cents per kilowatt-hour, as long as they are in a so-called postcoderoos; a four-digit postcode plus adjacent figures. Along with not paid VAT this provides a discount of 9 cents per kilowatt-hour.

The project the Ramplaan in the Ramplaankwartier in Haarlem is one of the first cooperatives in the Netherlands that wants to make use of these arrangements. Residents place nearly 1,500 solar panels on a large hall in the neighborhood, by which they annually generate 300,000 to 400,000 kilowatt-hours of electricity, accounting for 10 to 15 percent of the power consumption in the neighborhood. Almost all solar panels are already sold.

The problem is that the cooperative may not use the existing power connection, but must pay 30,000 euros for a new connection. Also, she is regarded as a taxable organization. Furthermore, the cooperative may not grant people of modest means a loan for the purchase of solar panels and the tax credit is void in case citizens consume less power than agreed.

"This is pure harassment by the Minister and the State Secretary" says founder Matthijs Hisschemöller of the Ramplaan. "It seems that the government is trying all possible ways to counteract the production of renewable energy. The postcoderoos is in principle a fabulously good arrangement, but the Lower House should monitor this closely or it will fail".

The questions that the ChristenUnie has posed are thus all about the barriers that they must overcome in Haarlem. According to energy researcher Anne Marieke Schwenke it is almost impossible for cooperatives to set up a profitable business case. Together with the PBL, Schwenke recently conducted a research on the relationship between civil initiatives and municipalities. According to her, the postcoderoos is overly complicated and bureaucratic. For example, a cooperative must sell its power to a power company, which in turn must redeliver it to its members through various energy companies. "The high network costs are only one of the problems. The arrangement is incredibly complex and therefore I do not support it", says Schwenke.

"In the Netherlands, there is huge enthusiasm among people to put solar panels on roofs, but I am very concerned about this construction. It is going to backfire and that would be a missed opportunity".

Instead of the postcoderoos, Schwenke pleads for the introduction of feed-in tariffs, as Germany and Belgium have success with this, or SDE + operating grant, which now applies only to companies and institutions. "In this case you get a fixed price for the electricity generated and there are minimal links in the whole process", says Schwenke.

Sustainability consultant Ronald Franken is currently working on a broad-based business case of the postcoderoos, in which provinces, banks, housing associations and local authorities cooperate. The aim is to identify the feasibility of various market segments and create an overview of all the risks. "But it is clear to the parties beforehand that the postcoderoos is complex and restrictive. It looks like the business case can only be achieved when municipalities, provinces and energy companies provide support to the cooperative", he says. "This is an arrangement that brings along many local unnecessary costs for generating their own power, and mostly limits and slows down and thus also inhibits the growth potential of the solar energy market".

According to him, the pay-back time of a real business case of postcoderoos projects lies between 15 and 18 years. That is not interesting for people. "With positive assumptions pay-back times can be reduced to 10 to 12 years. However, there are many uncertainties in this. There will be parties who will be investing money in this, but I hope they will not be disappointed", says Franken. He also advocates a SDE + arrangement for private individuals. "You will get a fixed amount for your power for 15 years. You can build a business case on that".

The only speaker at The Solar Future NL who is positive about the potentials of the postcoderoos is Ron Verschoor, director at Zonnegrond. His company hires fallow pastures of municipalities to build solar power plants. A kind of allotment garden, but with solar power as the harvest. People who live within the postcoderoos of such sites can join and save up to 20,000 euros in twenty years on their energy bills, according to the expected calculation of Zonnegrond.

For the first project in Broekland already more than 1,000 solar panels were sold, and the first energy will be delivered in June. The sites on which the solar power plants are to be built are already provided with connections by the provider. Therefore Zonnegrond does not have to pay high network costs.
The first project was so successful that the second will start soon in Heerhugowaard.

"This way we concatenate the postcodes. In our case, the tax credit from the energy agreement gives sufficient returns. Participants earn back their investment within a decade", says Verschoor.

More information: www.thesolarfuturenl.com