Serbia’s renewables incentive fee raised fivefold

The Government of Serbia has decided to increase the surcharge paid by electricity consumers to fund renewable energy incentives from RSD 0.093 (EUR 0.00079) per kWh to RSD 0.437 (EUR 0.00371).

The fee paid by consumers through their electricity bills to fund the feed-in tariff scheme for privileged power producers was last increased in 2015, from RSD 0.081 per KWh to RSD 0.093 per KWh. The fee is regulated by a government decree, and is reviewed every year.

The fee was introduced in Serbia in 2013 in order to provide funds to encourage investments in the production of renewable energy

Interestingly enough, the same fee in the Bosnian Serb entity Republic of Srpska has recently been lowered.

The fee was introduced in Serbia in 2013 in order to provide funds to incentivize the production of renewable energy at wind farms, small hydropower plants (SHPPs), biogas power plants, and solar power plants. Incentives are paid in the form of feed-in tariffs to the owners of these plants who have been granted the status of privileged power producers, meaning that the Government of Serbia has approved the payment of subsidies.

Find-in tariffs have been abandoned by almost all the European Union (EU) member states, but also by most countries in the region that are not members of the EU. They have switched to incentive models that are more market-based, such as auctions or concessions, because it lowers fees paid by citizens and businesses.

Incentives are paid in the form of feed-in tariffs

At the beginning of 2019 Serbia announced the introduction of auctions, but since then there has been no official information on the status of the process. Feed-in tariffs in Serbia cannot be abolished for existing privileged producers because they have been approved for periods of 12 years, depending on the start of production, but the transition to auctions would reduce subsidies for renewable sources in the future and accelerate their development.

The average consumer’s monthly bill will increase by about EUR 1.02

The fee paid by consumers is calculated by multiplying the amount of the fee by the amount of electricity consumed in one month.

For citizens with the average monthly consumption, of 350 kWh, the increase of the fee in 2021 will mean this item on their bill will rise by about RSD 120 (EUR 1.02), from about RSD 33 (EUR 0.28) currently to about RSD 153 (EUR 1.3).