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Solar in Bulgaria
Bulgaria is one of the sunniest European countries. The feed – in tariff in this country is higher, while real estate and labour expenses are lower compared to those in other European member states, making investing in solar plants in Bulgaria attractive.
- Bulgaria has significant solar potential equal to the potential of Northern Spain and exceeding Germany by 10 – 15%
- Currently there are very few solar installations in the country so the market is not saturated (local electric companies have available quotas for renewable energy production)
- Both the European Union and the Bulgarian Government are encouraging the development of solar plants by fixing a high feed tariff of E 386/MHh ($ 569/MWh) a value 3.47 times higher than the value of the feed - in tariff for other renewable energy sources
- Income tax in Bulgaria is 10%. Local electric companies are required by law to sign a 25-year contract for the purchase of the produced electricity at the feed - in tariff determined by the regulator
- Land, construction and labour costs are much lower in Bulgaria compared to other European countries
- Solar Energy in Bulgaria has the potential to earn investors an IRR of between 30-50% over 5 years
- Full EU member state with reliable and internationally-experienced banking system for safe investment and withdrawal
Solar Irradiation in Europe and Bulgaria:
Status of the grid:
There have been reports that the sudden flood of renewable energy projects that will hit the Bulgarian grid will cause blackouts. However, these reports were based on the initial calculation of 8,000MW of renewable projects sitting at various stages of the permissions process in 2009. Currently there are only 4MW of operational plant in Bulgaria. The Government has since intervened and requested a bank statement showing 5% of total project cost, before building permission is granted in order to alleviate the pressure on the planning system, give more time for the development of the existing grid and encourage professional developers. There is apparently enough capacity to handle the 10,000MW target for renewables set by the government for 2012, according to our advisors.
Grid operators:
Electricity companies that control the grid and their geographical location within the country
Projected growth:
Bulgaria is expected to be a dynamic market over the next 5 years. New Energy Finance (NEF PV Market Outlook September 30 2009) has forecast these markets out to 2010.
NEF Conservative Case
| MW Installed Per Annum | 2009 | 2010 | 2011 | 2012 | TOTAL |
| Bulgaria | 20 | 40 | 80 | 160 | 300 |
NEF Optimistic Case
| MW Installed Per Annum | 2009 | 2010 | 2011 | 2012 | TOTAL |
| Bulgaria | 71 | 142 | 284 | 500 | 997 |
Banking in Bulgaria:
In keeping with its entry into the EU, the banking system in Bulgaria has made significant reforms over the past 10 years, becoming more open and transparent. We are connected to Piraeus Bank, which has an existing track record for financing renewable projects in Bulgaria. The Association of Commerce Banks is a body that represents all recognized financial institutions in Bulgaria, and as such acts as a bond of reputability. The full list of Bulgarian ACB member Banks is listed below:
• First Investment Bank
• Roseximbank
• Expressbank
• Societe Generale
• Union Bank
• United Bulgarian Bank
• Roseximbank
• Expressbank
• Societe Generale
• Union Bank
• United Bulgarian Bank
• Bulbank
• Biochim
• Central Cooperative Bank
• Economic & Investment Bank
• Demirbank
• Encouragement Bank
• Biochim
• Central Cooperative Bank
• Economic & Investment Bank
• Demirbank
• Encouragement Bank
• Bank DSK
• Procredit Bank
• Tokuda Bank Plc
• Eurobank
• ING Bank
• Procredit Bank
• Tokuda Bank Plc
• Eurobank
• ING Bank
Renewable Energy in Bulgaria:
The EU quota on renewables for Bulgaria stipulates that renewable energy should account for 11% of gross energy consumption after 2010 and 16% after 2020. Bulgaria has taken major legislative steps to meet the quota, leading to a boom in entrepreneurial interest and stated intentions for over 10,000MW in renewable energy projects. This is more than three times Bulgaria’s installed capacity in renewables at the beginning of 2008 and much higher than what is needed for Bulgaria to meet its quota.
Most of the increase in renewable energy production will come from wind and solar sources and biomass as there is little space left for hydro developments. Hydro power is estimated at around 2600 MW and presently makes up most of Bulgaria’s installed capacity in renewables. However, with an estimated wind power capacity of 2,200-3,400MW and a good climatic and agricultural profile for development of solar and biomass projects, the country is well on the road to diversifying its renewables portfolio.
The Bulgarian legislature encourages energy production from renewable sources via preferential tariffs consisting of two components:
80% of the average end supplier price for the previous calendar year; a mark-up determined by the State Energy and Water Regulatory Commission.
Overall, the next ten years will be a time of increased business and political activity in the field of renewables, as Bulgaria progresses towards its 2020 quota.
TEL +359 700 10 522 Mob +359 894 416 774 info@bulgariansolar.net
