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Are subsidies for biogas plants being withdrawn from renewable energy funding for farmers?

Czy dotacje do biogazowni są wycofywane z dofinansowań OZE dla rolników?
  • How many proceedings currently, i.e. most likely in 2024 (NFOŚiGW responded about the current status without providing dates) regarding applications for subsidies for biogas plants, have been received by the office and are currently underway and when can we expect them to be completed in the case of the Energy for Rural Areas program?
  • There are currently 42 applications for funding at the negotiation stage. Agreements are being prepared for 4 applications. 220 applications are at various stages of assessment – the National Fund for Environmental Protection and Water Management responded to us.
  • Only 4 applications were considered under the last edition of the Energy for Rural Areas programme, and as many as 220 applications are currently waiting to be considered.
  • What should investors, including farmers, do if they carry out such large investments and have no way to pay contractors for the implementation of individual stages of biogas plant construction?
  • The Ministry of Agriculture and Rural Development and the National Fund for Environmental Protection and Water Management have decided to resume recruitment under Energy for the Countryside 2024. The reason is the huge interest of farmers in investments in renewable energy sources, in particular in agricultural biogas plants. The National Fund for Environmental Protection and Water Management plans to increase the budget of the Energy for the Countryside program to PLN 3 billion, including PLN 1 billion for repayable forms of funding and PLN 2 billion for non-repayable forms of funding (grants). But when will they obtain the funds?

Farmers who want to use energy and heat from renewable energy sources, mainly for agricultural activities, can take advantage of three main government subsidies. Thanks to them, they will gain additional financial resources not only for the implementation of an investment enabling the construction of a photovoltaic installation with dedicated energy storage, but also for agricultural biogas plants. What has changed in subsidies for renewable energy sources in agriculture at the end of 2024?

Renewable energy in agriculture should be subsidized

Every farmer who decides to invest in photovoltaics, heat pumps or wind farms or even biogas plants can choose one of the government programs, thanks to which they will receive a non-repayable subsidy or loan without realizing their plans.

It is worth remembering that some of these government programs also assume the possibility of taking a repayable loan for the implementation of RES investments and on very preferential terms, then the farmer can reach for higher amounts than in the case of non-repayable subsidies. Such a solution works well when investing, for example, in very expensive biogas plants, which should provide a stable return on investment in the long term. How do individual government subsidies for photovoltaics differ?

Check the updates on renewable energy subsidies for farmers in the Agroenergia program

Government subsidies differ not only in the amount of subsidies, but also in the amount of loans and the type of RES installation.

It is worth adding that the recruitment for biogas plants has been unblocked under the Agroenergia program, we will not be able to obtain funding or a loan for this investment purpose. In addition, many farmers criticize this RES program for the fact that RES installations with a small capacity of only up to 50 kW are subsidized.

Under this program, you can also obtain additional funding for an energy storage facility in the form of a subsidy of up to 20% of eligible costs, with the eligible cost not exceeding 50% of the costs of the energy generation source. Interestingly, you can also apply for subsidies from the Agroenergia program for the purchase and installation of a heat pump with a capacity greater than 10 kW and no greater than 50 kW. However, submitting an application is conditioned by a prior energy audit, which recommends the requested scope of the project. Agroenergia will work well in the case of smaller and therefore less expensive investments in renewable energy sources in agriculture.

Government programmes subsidising renewable energy in agriculture at the end of 2024

Name of the program What will you spend the grant/loan on? Basic requirements Maximum amount From/until when is the program valid? Agroenergia

Farmers can receive a non-repayable subsidy for, among others, the installation of a photovoltaic system, a wind farm, a heat pump with a capacity of 10 kW to 50 kW

Financing in the form of a loan up to 100% of eligible net costs, provided that the total amount of financing in the form of a grant and a loan from the Fund cannot exceed 100% of the eligible net costs of the project

You cannot start installing a photovoltaic system before submitting an application for a subsidy

To benefit from the subsidy, you must be the owner or lessee of a farm whose total area should be no less than 1 ha and no more than 300 ha and you must have run the farm for at least one year.

When investing in a heat pump, an energy audit is mandatory

Up to PLN 25,000 for installations with a capacity above 30 kW and up to PLN 15,000 for installations up to 30 kW

For projects involving the construction of a hybrid installation, i.e. a photovoltaic system with a heat pump or a wind farm with a heat pump, coupled into one system, the subsidy is calculated based on the installed capacity of each device separately and an additional amount of PLN 10,000 is provided.

Applications for the program can be submitted no later than September 30, 2025. Energy for the countryside

Loan for photovoltaics from 50 kW to 1 MW

Energy storage subsidies

Subsidies for biogas plants and hydroelectric power plants with a capacity of up to 1 MW (biogas plants for heat production with a capacity of up to 3 MW)

The condition for granting support is to start the investment only after submitting the application for funding

A farmer can obtain a loan of up to PLN 25 million for a photovoltaic installation and a subsidy of up to 20% of eligible costs for an energy storage integrated with an energy source

Maximum subsidy amount for biogas plants and hydroelectric power plants up to 65% of eligible costs up to PLN 20 million

Recruitment closed on February 29, 2024.

The Ministry of Agriculture and Rural Development and the National Fund for Environmental Protection and Water Management announce further funding for 2024-2025

CAP 2023-2027 (previously Rural Development Programme 2014-2020)

Area B and C

Temporarily withdrawn subsidies for agricultural biogas plants within area A

Farmers can obtain subsidies under the Investment in Agricultural Farms in the field of Renewable Energy Sources and improving energy efficiency

Farmers can obtain funding for a photovoltaic installation with a capacity of up to 50 kW together with accompanying devices that are an integral part of the installation – e.g. an energy storage and a HEMS/EMS system or a heat pump

In case of purchasing PV, an electricity storage device will be connected, and the capacity expressed in kilowatt-hours (kWh) will be no less than the product of the installed electrical power of the PV expressed in kilowatts (kW) and the conversion factor of 0.5

The total power of devices generating electricity used for the needs of single-family residential buildings included in the household will not exceed 10 kW and will constitute no more than 20% of the total power of devices generating electricity from renewable energy sources located in the household

The total power of devices generating electricity used for the needs of single-family residential buildings included in the household may not exceed 10 kW and will constitute no more than 20% of the total power of devices generating electricity from renewable energy sources located in the household.

The aid will take the form of a refund, which means that the beneficiary will first have to cover the entire cost from their own funds or from a loan (without preferential terms)

Payment will be made upon presentation of invoices

The minimum eligible cost must be PLN 20,000 (net) and the investment implementation time cannot exceed 24 months.

Up to 65% of eligible costs

An advance payment of 50% of the aid amount may be granted and paid for the implementation of the operation, provided that the applicant applies for it

The maximum amount of aid within Area B cannot exceed PLN 200,000 per farm.

The total aid limit per beneficiary during the implementation period of the Strategic Plan for the Common

The application process began on November 21 and will end on December 30, 2024. Source: NFOŚiGW, ARiMR

Applications for subsidies for biogas plants are at a standstill and recruitment has been suspended under the Energy for Rural Areas programme?

A fairly important program subsidizing large investments in renewable energy sources in agriculture is Energy for the Countryside. Farmers could apply for repayable subsidies for biogas plants from this government program, and if they were thinking about photovoltaics, they could apply for preferential loans. Recruitment under the Energy for the Countryside 2024 program ended on February 20, 2024. And what can I say, very few applications for subsidies for agricultural biogas plants were considered.

How many proceedings currently, i.e. most likely in 2024 (NFOŚiGW responded about the current status without providing dates) regarding applications for subsidies for biogas plants, have been received by the office and are currently underway and when can we expect them to be completed in the case of the Energy for Rural Areas program?

There are currently 42 applications for funding at the negotiation stage. Agreements are being prepared for 4 applications. 220 applications are at various stages of assessment – the National Fund for Environmental Protection and Water Management responded to us.

Only 4 applications were considered under the last edition of the Energy for the Country program, and a trifle of as many as 220 applications are currently waiting in the queue to be considered. What should investors, including farmers, do who implement such large investments and have no way to pay contractors for the implementation of individual stages of the construction of biogas plants?

However, the Ministry of Agriculture and Rural Development and the National Fund for Environmental Protection and Water Management have decided to resume recruitment under Energy for Rural Areas 2024. The reason is the huge interest of farmers in investments in renewable energy sources, in particular in agricultural biogas plants. The National Fund for Environmental Protection and Water Management plans to increase the budget of the Energy for Rural Areas program to PLN 3 billion, including PLN 1 billion for repayable forms of funding and PLN 2 billion for non-repayable forms of funding (grants).

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The National Fund for Environmental Protection and Water Management announced that the beneficiary of the Energy for Villages 2024 program will, as before, be an energy cooperative or its member, and farmers who will be able to apply for co-financing for the installation of renewable energy sources together with energy storage facilities located in rural and rural-urban communes.

NOŚiGW announced that the intensity of funding in the future edition of the Energy for Villages 2024 programme will depend on, among others, the type of entity applying for support, the type of RES installation and its capacity.

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In the Rural Development Programme 2023-2027 there are no subsidies for area A, i.e. for biogas plants in 2024.

From the farmer's point of view, the Rural Development Programme (RDP) now the Common Agricultural Policy (CAP) 2023-2027 seems to be very attractive among nationwide subsidy programmes, because it offers the most benefits, but its recruitment is relatively short. At the end of 2024, farmers reaching for RES subsidies from the CAP must prepare for the next recruitment in areas B and C from 21 November this year. In the case of area A, i.e. subsidies for agricultural biogas plants, there will be no subsidies from the CAP, which is a rather surprising turn of events. Why? The withdrawal of subsidies from the National Fund for Environmental Protection and Water Management for agricultural biogas plants means changes in the policy of subsidising RES not only in agriculture. After all, supporting the subsidy of agricultural biogas plants was a flagship element of the government's and the Ministry of Agriculture's policy.

Local funding programs may also prove beneficial, such as the Eco-Climate, Water, Air, Land program run in the Kuyavian-Pomeranian Voivodeship, which will last until 2027. It is therefore worth finding out what support we can obtain in our province, district or commune.

What relief can a farmer receive for the purchase and installation of photovoltaics?

Farmers who, for some reason, cannot access government subsidies for renewable energy sources can take advantage of other solutions that will reduce the costs of investing in photovoltaics on a farm.

In such a case, the most beneficial solution is to reach for the investment relief in agricultural tax. Thanks to it, a farmer who owns agricultural land and, for example, a photovoltaic installation, can deduct 25% of the value of the photovoltaic investment from agricultural tax for 15 consecutive years.

Every farmer can apply for relief you can apply for relief from agricultural tax if the photovoltaic installation is already installed and the investment is completed. An important aspect here is collecting all documentation, mainly invoices, confirming the purchase and installation of the photovoltaic system. It should be remembered that the relief is only available to those farmers who decide to install it on a farm building, and most of the energy that will be produced will be used to conduct agricultural activities.

Is it possible to combine agricultural tax relief with renewable energy subsidies?

Agricultural tax relief for, for example, a photovoltaic installation cannot be combined with government subsidy programs for renewable energy sources. According to the law, deducting photovoltaics from agricultural tax will not be possible if this investment was financed in whole or in part with public funds. Therefore, combining this relief with photovoltaic subsidy programs, such as Agroenergia or Energia dla wsi, is excluded.

There are no legal prohibitions against granting investment relief for a project financed with the help of a commercial loan for a farmer – provided that it is not subsidised in any way from public funds.

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