Albania to cancel VAT for solar, wind power equipment

The Ministry of Infrastructure and Energy of Albania revealed it has prepared a decision to exempt imported machinery and other equipment for the production of green energy from the value-added tax. Electricity exchange ALPEX will be launched on November 23, Minister Belinda Balluku said.

After two months of discussions in a working group with the representatives of the business sector, the Ministry of Infrastructure and Energy said it decided to approve some of their requests to ease the impact of the energy crisis. Even though the International Monetary Fund occasionally criticizes exemptions from value-added tax, the government opted to introduce the measure for all machinery and other equipment imported to invest in solar energy and wind power, public broadcaster RTSH reported.

The financial effect of the exemption from VAT is yet to be estimated

The ministry’s draft decision was passed to the Ministry of Finance and Economy for evaluation. The financial effect needs to be estimated given that the budget for 2023 is being drafted, according to the announcement.

The permitting procedure for the construction of renewable energy facilities will continue to be simplified, the report adds. On the other hand, the request from the automotive industry to exempt it from the 500 kW capacity cap for renewable energy systems was denied.

ALPEX, due to start operating next month, is expected to experience liquidity issues as KESH is purchasing all the electricity due to the current emergency measures

Deputy Prime Minister and Minister of Infrastructure and Energy Belinda Balluku asserted that the limit is the highest in Europe. Only Italy and Greece also allow 500 kW, in her words.

Balluku said the Albanian Power Exchange (ALPEX) would start operations on November 23. She expressed confidence that the market would grow, but also pointed out that state-owned hydropower plant operator KESH is currently authorized under the emergency rules for the security of supply to purchase all the electricity necessary for domestic consumers.

Elsewhere in the region, Montenegro recently said it may abolish VAT on solar panels, right after Croatia announced its plans to introduce the same measure.