The Green Savings Program will change, public buildings will lose funding

Prague, April 20 - The subsidy program for building insulation and ecological heating Green Savings is currently short of nearly eight billion crowns. The Ministry of the Environment intends to address the deficit partly by stopping the provision of subsidies to public buildings. Environment Minister Tomáš Chalupa stated this at a press conference today, noting that all pending applications should be satisfied. So far, nearly 37,500 applications have been approved in the Green Savings program, with almost 25,000 applications complete and awaiting approval. More than 16,600 applications are incomplete, and applicants will have to supplement their documentation.
According to Chalupa, shortening support for public buildings will save four billion crowns. By reviewing all types of applications, a savings of one billion crowns should be achieved. An additional 600 million crowns can be expected from the sale of emission allowances to Japan and Germany and 250 million crowns from a reduction in technical assistance. The Ministry of the Environment has recorded a total of 79,093 applications for Green Savings subsidies. To date, an amount of 4.28 billion crowns has been reimbursed to applicants.
"We had to deal with the entire problem while also wanting to satisfy as many private applicants for support in the Green Savings program as possible, for whom the program was initially intended. I very much regret that cities and municipalities will not receive support; however, unlike private applicants, they have other options for applying for contributions," said Chalupa.
According to the minister, the priority now is to process existing applications. The reopening of the Green Savings program for new applications is currently not under consideration.
Today, the government acknowledged the minister's plan for the distribution of subsidies in the Green Savings program. "Applicants with incomplete applications, of which there are more than 16,000, will be asked to supplement them within 60 days," Prime Minister Petr Nečas said following the cabinet meeting. In such a case, they will receive subsidies in the originally declared amounts.
"According to our calculations, we are able to pay out all completed applications. Applicants with incomplete applications will be asked to correct them. Gradually, we will try to replenish the resources of the fund and also reimburse applications step by step. Our goal is to gradually cover everyone," said Chalupa.
It is still unclear whether all interested parties will be satisfied with the subsidies. The ministry considered reducing the support from 65 to about 50 percent of the total project price. However, Chalupa rejected this option today, stating that it would create inequality between past and current applicants.
Chalupa mentioned that upon taking office at the beginning of the year, he inherited the Green Savings program in a fairly critical state. "There was no overview of the basic facts of the program. It was not known how many applications there were or in what volumes. Everything had to be set up anew," he stated. According to the minister, the program was accompanied by a number of errors. The Ministry of the Environment, he said, deviated from the concept of the program at the beginning of its implementation, particularly regarding the level of subsidy set. Control systems and risk analysis were also not established in a timely manner, the minister added.
Within three months, Chalupa plans to announce a selection procedure for the director of the State Environmental Fund (SFŽP), which manages the Green Savings program. Following the alleged corruption scandal in the fund, Libor Michálek was removed from his position as head of SFŽP last year. "I will want a clear and long-term concept for the entire organization from the new leadership," said Chalupa. The minister also wants to establish the position of an ombudsman within the Green Savings program to ensure that applicants' complaints and suggestions are addressed as quickly as possible.
The Green Savings program was launched in April 2009 and is intended to support energy savings and the use of renewable energy sources in residential buildings. Support is provided in the form of non-entitled subsidies. The ministry suspended the acceptance of subsidy applications due to their high volume last October. It originally planned for this break to last until the end of January.
The funds for the Green Savings program are obtained by the Czech Republic through the sale of emission units. These are effectively the difference between the Czech Republic's commitment to the Kyoto Protocol on reducing greenhouse gas emissions and their actual decline compared to 1990. Countries can sell their surpluses to other countries that do not meet the limits. One emission unit represents a tradeable right for a country to emit one ton of carbon dioxide into the atmosphere during the period from 2008 to 2012.
The Association of Mineral Insulation Manufacturers (AVMI), which represents 90 percent of the mineral insulation market, welcomed today's information about the next steps in disbursing funds from the Green Savings program. At the same time, they urged Chalupa to initiate steps to reopen the program for accepting new applications.
Chalupa's decision to satisfy all pending applications was also welcomed by the environmental group Hnutí Duha. However, they pointed out that the potential for insulation in Czech households remains significant. Several thousand buildings have been insulated, yet there are 1.4 million family houses in the Czech Republic, environmentalists reminded.