UNLICENSED SOLAR ENERGY GENERATION
The activities exempted from the obligation to obtain a license and establish a company are stipulated in Article 14 of the Electricity Market Law No. 6446 ("Law"), titled "Activities that can be carried out without a license". Besides, it has been indicated under Law that the technical procedures, principles, and other issues shall be determined by regulation to be circulated by Energy Market Regulatory Authority ("Authority").
Based on Article 14 of the Law, the "Regulation for Unlicensed Electricity Production in the Electricity Market"("Regulation"), which was published in the Official Gazette dated 12.05.2019 and numbered 30772, the details of electrical energy production were regulated without obtaining a license and establishing a legal entity. Although the Regulation has been amended four times until now, the latest amendment has entered into force after being published in the Official Gazette dated 11.08.2022, numbered 31920.
With the latest amendment on the Regulation, the unlicensed electricity generation limit of solar power plants in the residential subscriber group was updated. According to the article 11 of the Regulation, the limit for unlicensed generation facilities whose production and consumption is connected at the same point has been increased to 25 kW (including 25 kW) from 10kW.
A new retroactive limitation on electricity produced in excess of consumption has been implemented. This limitation states that the amount of generation that can be sold cannot exceed the total electrical energy consumption of the consumption facility, including those who are eligible to receive a call letter for the connection agreement as a result of applications submitted after 12.05.2019. The excess energy supplied to the system is considered a free contribution to YEKDEM. This rule, however, does not apply to residential subscribers with an installed power of 50 kW or less.
Another significant change in the Regulation was made regarding the ease of the obligation to have production and consumption facilities in the same region. Accordingly, as a rule, it is obligatory that the generation facilities and consumption facilities of natural person or legal entity who will install solar energy must be in the same region. However, within the scope of clause 5/h of Article 5 of the Regulation, it will be able to establish a production facility outside the distribution license area where the consumption facility is located.
Unlicensed Solar Energy Production Application Process is as follows;
* Documents for unlicensed electricity generation are prepared and submitted to the relevant electricity grid operator.
* Relevant network operator; refers to the Turkish Electricity Transmission Company (“TEİAŞ”), the distribution company or the legal entity holding the OSB distribution license, depending on its relevance.
* Applications that are determined to have been made completely are then evaluated in terms of technical aspects.
* If a connection opinion is given as a result of the technical evaluation in solar energy applications, the application's technical evaluation report is prepared and sent to the relevant network operator.
* The invitation letter for the connection agreement regarding the solar energy generation applications with a positive connection opinion in the technical evaluation report is notified to the relevant person upon the written application by the network operator.
* One hundred and eighty days are allowed to those who have received an invitation letter for the connection agreement to complete the necessary steps from the day they were informed of the call letter for the connection agreement. For the projects subject to the Annex-1 List of the Environmental Impact Assessment Regulation and projects with the decision "EIA Required," the owners of the invitation letter to the connection agreement apply to the competent administration within the first thirty days of the indicated period. Then, within the first ninety days, invitation letter holders submit the production facility and, if applicable, the connection line project to the Ministry or the institutions and/or legal entities approved by the Ministry. Natural person or legal entity that submit connection applications outside of the aforementioned time frames will have their provided documents ruled invalid and returned to applicants.
* In case the relevant natural person or legal entity submit the documents written in paragraph 2 of Article 17 of the Regulation in full, the relevant network operator is obliged to sign a connection agreement with the aforementioned natural person or legal entity within thirty days.
* The solar power plant project must be consummated within three years starting from signature of the connection agreement, and the acceptance procedures must be finalized. Following finalization of acceptance procedures, the solar power plant can start active production with 25kW limit.
* Finally, it should be noted that, according to the amendment dated 09.11.2022 on the 9th paragraph of the article 9 of the Income Tax Law No. 193; income tax exemption is granted for the sale of surplus electricity produced by solar power generation facilities with a maximum power of up to 50 kW (including 50 kW) installed by the real person owners or tenants of the residences on the roofs and facades of the residences and their accessories to the latest source companies.