SOLAR PANEL SYSTEMS NOW WITH A GOVERNMENT GRANT OF UP TO 50%

At the end of 2020, it was announced that the Scheme for Homemaking will include housing renovation grant, which can also be used to install and replace a solar collector and solar panel system. The exact details are published in the Hungarian Gazette No. 259 of 2020, 518/2020. (XI.25.) (CLICK HERE).

The following is a summary of the most important information about solar collectors and solar panel systems.

Who is the home renovation grant for?

Families who have their own home and intend to live there and raise or expect at least one child (from the 12th week of pregnancy to the age of 25 of the child – if he/she lives with the family).

What are the conditions for grant?
  • Hungarian citizenship
  • Waiver of public debts
  • Raising at least one child (even with a 12-week-old foetus).
  • At least one year of continuous social security (with a maximum break of 30 days).
  • The claimant (s) must own at least 50% of the property.
What exactly is a home renovation grant for?

In addition to the installation and replacement of the solar collector and the solar panel system, the following construction activities are eligible for housing renovation grant:

 

  • installation of water, sewerage, electricity, gas utilities, or construction or replacement of its internal network,
  • construction of a bathroom or toilet in an apartment that does not have such a room
  • design, modernization, or replacement of heating system components, including the use of renewable energy sources,
  • insulation of the building, including plinth insulation, heat, sound, and waterproofing works,
  • mount or replacement of external windows, roller shutters, shades, shutters, insect nets, safety grilles
  • replacement or renovation of cornices, doorsteps,
  • roof replacement, renovation, insulation,
  • construction and modernization of flue gas
  • installation and replacement of air conditioners,
  • interior renovation, including
    • replacement and renovation of the interior wall, floor, ceiling, or ceiling covering of the premises of the building,
    • painting, wallpapering,
    • gallery construction,
    • the design and replacement of the internal staircase,
    • installation or replacement of sanitary ware,
      design and replacement of light switches and sockets,
    • the installation, replacement or refurbishment of interior doors, windowsills, and doorsteps,
  • renovation of a building with the same real estate registration topographical number as the building, non-residential premises (especially summer kitchen, laundry room, storage),
  • construction of a fence,
  • construction of a car storage room or an open car park,
  • construction of terrace, loggia, balcony, canopy,
  • preparation and replacement of space coverings,
  • design of a winter garden
  • if the claimant or his or her child is a person with reduced mobility – 12/2001. (I. 31.) Government Decree, Section 9 (10),
  • strengthening the foundation structure, and
  • installation and replacement of built-in furniture or kitchen appliances.
What does 50-50% rate mean? - Examples of settlement

According to the information given, the grant rate is 50% of the renovation costs certified by invoice, but the maximum of HUF 3,000,000, but there is a sentence in the tender that may cause misunderstandings:

“The amount of the grant may include 50-50% of the material cost or the wage fee.”

In the prospectus issued by the Hungarian State Treasury, the control body of the program, it explains the method of calculating the 50-50% ratio with the help of the following examples:

“Examples:

  • Total cost of renovation: HUF 6,000,000
  • Material cost: HUF 4,500,000
  • Wage Fee: HUF 1,500,000
  • Payable grant: HUF 3,000,000

Given that the ratio of material costs to fee in the amount of support must be 50-50%, which is met by HUF 1,500,000 -1,500,000, the maximum amount is due.

  • Total cost of renovation: HUF 5,000,000
  • Material cost: HUF 4,000,000
  • Wage Fee: HUF 1,000,000
  • Payable grant: HUF 2,000,000

The maximum grant amount would be HUF 2,500,000, but since the wage fee is only HUF 1,000,000, the 50-50% rule applies if only HUF 1,000,000 of the material cost, we consider, so the grant that can be paid is HUF 2,000,000.

  • Total cost of renovation: HUF 1,000,000
  • Material cost: HUF 1,000,000
  • Wage Fee: 0, – Ft
  • Payable grant: 0, – HUF

The grant that could be paid would be HUF 500,000 if an invoice for a wage fee of at least HUF 250,000 had been submitted. Given that in this case one of the costs is below 50% of the possible aid amount, the 50-50% rule can in no way apply, so no aid can be paid.

The grant may be applied for only within a period of 60 days after the completion of the construction and building works listed in the legislation and the settlement of the last invoices.

When is the maximum grant amount available?

Using a simplified approach: specifically for solar panel systems, the maximum grant of 50% can be applied when the wage fee reaches 25% of the total investment amount.

It is important to emphasize that an amendment in December 2020 introduced unit costs – the limit was set at a gross price of HUF 450,000 / kWp for a solar panel system – so state grant may only be used for cheaper systems.

What can be done if there are not enough self-contribution to apply for grant?

As part of the Scheme for Homemaking, Home Renovation Loan is available from 1 February, which covers a real estate-backed mortgage loan with a maximum amount of HUF 6 million, a maximum term of 10 years and a maximum interest rate of 3%. As the grant is post-financed, the Home Renovation Loan is primarily for those who do not have sufficient self-contribution for the full amount of the renovation.

Position Settlement - Why is 30 June an important deadline?

Solar panel systems installed after 30 June 2021, which are implemented with home renovation grant, are already subject to gross settlement. Therefore, if you want a solar panel system with position settlement, you had better start it as soon as possible (Do not forget that the licensing process can take up to several months)!

Position Settlement – Quick start – Settlement for Solar Panel Systems

After installing a solar panel system, the consumer in the traditional sense not only uses but also produces the energy that is regenerated to the system. In the case of position settlement, the consumer needs to pay only the difference between the energy regenerated to and received from the grid. Of course, the ratio may also have imbalance and a family with a solar panel will produce more energy than it uses. In this case, the electricity supplier pays based on the unit price included in the contract (You had better be aware that there is no 0 forint electricity bill, as an annual distribution fee must be considered in all cases – this amount, on the other hand, is only a few thousand forints a year).

The traditional meter is not suitable for position settlement, so the very first step is to install a two-way device in each case. After replacing the meter, the service provider changes the method of settlement to a balance and closes the previous period with an invoice. From now on, instead of monthly billing, the annual reading period will take effect, and the difference between the energy consumed and the energy produced, depending on who the balance language is tilted to, will be settled by the traditional consumer or service provider.

After 30 June 2021, the gross settlement will take effect!

The essence of the new form of billing is that it should not be accounted for by the difference between the energy received and recharged in each period (the situation will be a bit more complicated and less favourable for the user). The unit price of the energy purchased by the solar producer from the grid and the energy produced – returned to the grid but not consumed at the given moment – is determined separately. In the case of gross billing, therefore, there will be an electricity bill to be paid even if the solar panel system produces the family’s consumption for the whole year.

Therefore, it is worthwhile to install solar panel systems under the home renovation grant before 30 June 2020, when the gross settlement takes effect.

Other information
  • The grant can be applied for from 1 January 2021 to 31 December 2022.
  • The state bears a maximum of half of the costs.
  • Costs will be reimbursed retrospectively.
  • The support can only be used once by each family.
  • During a home renovation of at least HUF 6 million, support of up to HUF 3 million is available.
  • Support is available for several renovations works and investments (details above).

Our company, Pearl Enterprises Kft., in addition to the installation of solar panel systems, also deals with the general construction of construction works. If you decide that you want to use the housing renovation support for other works (also), we are at your disposal with our trained specialists in these cases as well!

For more information, please contact our colleague, who will be able to provide you with up-to-date information on how to apply for support in a free consultation every day of the week.

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