Which legal obligations exist for operators of photovoltaic systems? And what are the legal consequences of their violations? This article provides an overview of existing operator obligations.

If you place a direct investment into a photovoltaic system, you become an EEG (Erneuerbare-Energien-Gesetz, the German Renewable Energy Sources Act) system operator. As a result, you are facing a whole set of obligations in this new role. Developing a basic understanding of these obligations is crucial to make sure that you can manage third parties, such as external operators or service providers in an informed and efficient way.

On the other side, the legal consequences of not fulfilling these obligations can be considerable. In certain cases, operators can face monetary penalties or loose the entitlement to future funding under the Renewable Energy Sources Act (EEG, current status: 2017).

Overview of an operator’s obligations

When constructing and operating larger photovoltaic systems, a larger number of legal obligations should be taken into account. These can be technical requirements regarding the grid connection, such as the obligation to certify components and the entire system as a whole, requirements regarding the correct connection of the grid operator, or requirements  for the technical equipment of the system (e.g. remote control devices or special counters). In addition to energy law obligations, general public law requirements (e.g. approval requirements) and general tax obligations must be considered.

The energy law obligations differ according to how the electricity is used:

Electricity is fed into the public grid:

• with legal financial subsidies (e.g. direct marketing in the market premium model according to the Renewable Energy Sources Act)
• without legal financial subsidies (e.g. direct marketing with PPAs and proof of origin)

Electricity is consumed on site:

• for direct energy supply
• for self-supply

For all types of use, special constellations such as battery storage or electromobility applications may entail additional requirements.

The existing obligations origin in different energy laws such as the Energy Industry Act (EnWG), the Renewable Energy Sources Act (EEG) and the Electricity Tax Act and its Implementation Regulation (StromStG and StromStV). They can roughly be divided into requirements and obligations for:

• funding
• technical equipment
• measurement and billing
• reporting and notification
• taxes and levies

The number of regulations and their complexity has increased over time. Particularly in the commercial sector, the operator obligations “interact” with other obligations which apply to the company even before the operation of the photovoltaic system starts, such as the claiming of preferential treatment when purchasing electricity (e.g. reduced grid charges, electricity tax relief, EEG levy reductions). Qualified legal advice is particularly recommended for larger systems and more complex decentralized energy concepts.

Obligation to register in the “Core Energy Market Data Register”

All photovoltaic systems as well as battery storage systems, combined heat and power systems etc. must be registered in the “Core Energy Market Data Register” web portal of the Federal Network Agency – even those without EEG-funding. Within one month, the system operator and the commissioning must be registered.

The same applies to important changes to the photovoltaic system, e.g. a change of the operator or the capacity. Violations of the registration obligation can have considerable economic consequences. For example, the entitlement to a funding under the EEG may not apply as long as the start of operation or an increase in output has not been reported to the register. You might have to pay a fine in this case.

Obligations for subsidized systems

Legal requirements for photovoltaic system operators depend on the size of the system.

Systems with an installed capacity of over 100 kW are only subsidized by the EEG if the electricity is marketed directly using the market premium; this is linked to the following requirements:

The system must be located on an eligible area. This includes building roofs and other structural installations. In addition, some open spaces are also eligible, although the law sets different requirements for these so-called conversion areas, verges of motorways or railway lines, or areas that were designated as commercial or industrial areas in former development plans.

Special development plans are required for some areas. The eligibility of the respective area should be carefully examined in each individual case.

It must be possible for the grid operator and the direct marketer to control the system remotely. Furthermore, the grid operator must be able to retrieve the actual power supply of the system at any time.

The grid operator must be notified of the direct marketing claiming the market premium until the end of the previous month so that the remuneration is not reduced. The responsibilities must be negotiated with the direct marketer in the direct marketing contract.

Photovoltaic systems over 750 kWp

Systems with an installed capacity of more than 750 kWp must participate in a tendering procedure at the Federal Network Agency and receive an acceptance of tender in order to be able to claim the market premium. Financial collateral must be deposited for this. After the acceptance of the bid, an operator must apply for a so-called eligibility for funding at the Federal Network Agency.

Strict deadlines and formal requirements exist for a participation in tenders. If these demands are not met, you can be excluded from the tender. If a system that has been awarded a subsidy is not implemented on time, a penalty must be paid. In this case the Federal Network Agency retains the deposited securities. With few exceptions, it is not allowed to use the electricity from the tender systems for your own supply.

Ground-mounted systems over 10MW

Ground-mounted systems with a size of more than ten MW cannot receive subsidies by the EEG. You must be careful with the threshold values (750 kW/10 MW): There are cases in which different photovoltaic systems – possibly even from different operators – are taken into account together.

As a result, the most recently implemented systems can either no longer be funded or will be subject to restrictions by the tender requests. In these cases, it is important to contact the local building authorities in the same municipality in order to find out whether other ground-mounted systems within a radius of two kilometers have already been or will be put into operation in a period of 24 months before commissioning.

In the case of systems that have acquired their funding through a tender, the ban on self-supply under the EEG also applies. Thereafter, there is no funding for the entire calendar year if the system operator – except in certain exceptional cases –uses electricity from the photovoltaic system for self-supply.

In the case of very large photovoltaic parks, additional obligations may also apply, such as reporting EEG subsidy payments to the Federal Network Agency as part of the so-called transparency obligations to the Federal Network Agency or to the Market Transparency Office in accordance with the requirements of the Regulation on wholesale Energy Market Integrity and Transparency (so-called REMIT regulation) of the Market Transparency Agency.

Obligations for decentralized energy concepts

If you supply third parties with electricity on-site, all obligations of the Energy Industry Act for energy supply companies apply. Electricity supply contracts and electricity bills have to be formulated according to the given requirements.

For every kilowatt hour of electricity supplied, the full EEG levy must be paid. There are exceptions to this rule if customers are considered to be electricity cost-intensive companies under the EEG. Calibrated measurement and reporting notification to the transmission system operator is mandatory.

If you use the electricity exclusively for your own purposes, you must notify the distribution grid operator of these electricity quantities so that the EEG levy of 40 percent can be charged unless the EEG levy is not applicable The latter is the case, for example, for systems smaller than 10 kWp  for up to 10 MWh per year or for systems with inventory protection.

If a system is used in a mixed way, i.e. for self-supply and supply to third parties, you must report your electricity quantities to the transmission system operator. This may also be the case if your own consumption does not take place in the “direct spatial context” or if there is a grid electricity transmission.

In both cases, the full EEG-levy for self-consumption is due. Such matters should be examined in advance by specialized consultants.

In the case of the operation of battery storage devices and/or electromobility charging stations, special energy law obligations apply, which may also have to be taken into account (e.g. various registration and reporting obligations, obligations in connection with grid connection and with (as well as) measurement and billing requirements).

Obligations for direct electricity supply contracts

Instead of a subsidy, you can market your electricity via power purchase agreements (PPA). The same obligations as usual apply to the approval, power supply and reporting.

However, regulations that relate to the eligibility for funding do not apply in this case. In the PPA, all legal obligations should be appropriately distributed between the system operator and the electricity purchaser.

Electricity tax obligations

The electricity tax law places legal requirements on photovoltaic system operators. The specific obligations depend on the size of the system and the exact usage concept.  They may affect, especially in the case of decentralized third-party supplies and/or the operation of systems > 2 MW, the taxation of electricity volumes and various documentation and notification obligations.

They also concern the registration in the main customs office as a so-called “small supplier”. If you violate these obligations, you may be fined. In the worst case, the operator could face accusable tax cuts.

This article was created with the kind support of attorney Dr. Florian Valentin, von Bredow Valentin Herz, Partnerschaft von Rechtsanwälten

This is a free translation. To read the original article in German: click here.

Image source: Shutterstock – Indypendenz