Challenges in the Energy Market

The impending reform of the energy market, slated to integrate household consumers into the open energy market as of January 2025, promises substantial benefits for both the sector and the broader economy. However, it also introduces potential challenges of uncertainty and instability for the household consumers, who will have to navigate a completely new landscape. Households will be required to swiftly adjust to this new market environment by identifying reliable energy providers and keeping a close watch on market trends. Unfortunately, such adaptation demands both time and effort – resources that many families may find challenging to muster.

Opportunities for Energy Communities in Bulgaria

With the legislative changes to the Energy and Renewable Sources Act adopted in October 2023, Bulgaria has legally paved the way for the establishment of this new types of energy generators by granting them equitable access to the free market. In practice, these amendments have facilitated citizens in creating their own collective energy systems that provide a consistent supply of renewable energy at fixed and stable price, ensure investment returns, and open avenues for revenue generation. What is more, these legal amendments allow for the democratization of the energy sector, which has historically been dominated by large and specialized players. Civic energy associations have no restrictions on the number of members or the size of the installations, which in turn empowers individuals with substantial bargaining power within the democratic framework.

Sonnis Energy Bulgaria’s Business Model

Sonnis Energy Bulgaria plays a pivotal role in this new energy landscape with an innovative business model that unites citizens and local authorities in joint energy projects. Such collaboration offers numerous benefits to both sides:

• Benefits for Citizens: Citizens can attain energy independence and reduce their personal energy costs over the lifespan of the system, which often exceeds 25 years, with the potential for financial gain once the initial investment is recuperated within five to ten years. Additionally, regular interactions between citizens and local authorities foster personal connections and provide informal channels to address local issues.
  
• Benefits for Local Authorities: Local administrations also reap significant benefits from this partnership. By offering their available rooftop spaces for solar installations, municipalities can reduce their own costs while sharing the investments and benefits with citizens and investors. This partnership contributes to the achievement of the municipalities’ climate targets and enhances their resilience to energy crises.
  

How Can Sonnis Energy Bulgaria Help?

Sonnis Energy Bulgaria offers the much needed know-how and support to citizens and local administrations unfamiliar with the process of establishing energy communities by handling the critical steps of building a cooperative from the scratch. We offer:

1. Needs Assessment: Sonnis Energy conducts a thorough evaluation of the community’s energy requirements to determine the proportion of consumption that can be met through renewable sources. This step ensures that the solutions provided are tailored to the specific needs and potential of each community.

2. Technical Implementation and Installation: Sonnis Energy identifies the most suitable technologies for the project, develops a comprehensive technical plan, and partners with reliable suppliers and contractors to ensure high-quality installation and seamless integration of renewable energy systems.
3. Cost Assessment and Business Planning: We perform a detailed analysis of the investment costs associated with the renewable energy system and develop a strategic business plan to ensure a profitable return on investment, providing financial security and sustainability for the community.

A new program under the Recovery and Sustainability Plan will provide grants to finance solar power plants with a total budget of 200 000 000 BGN. The programme aims to meet the European Union’s goals for secure, sustainable, competitive and affordable energy. The Ministry of Innovation and Growth (MIG) has published the programme for public consultation until 12.01.2023. Here we provide a summary of the planned requirements and funding opportunities:

What projects are funded under the programme (cumulative criteria)?

• Solar photovoltaic energy systems for self-consumption, without the possibility of sale/injection into the grid
• Mandatory combination with batteries (electrical energy storage technologies and facilities) with a total minimum capacity to allow a power supply of at least 4 hours for at least 25% of the installed capacity of the PV system
• Erection on roof and facade structures of buildings connected to the electricity grid or closed electricity distribution network, and/or on real estate attached to them, in urban areas.
• Construction on a building and/or property owned by the applicant, and where this is not the case, the applicant must have a document establishing the right to build. The investment may not be carried out on a building/property which is used by the applicant through a lease or concession agreement
• Maximum capacity of the installation – 1 MW, but not more than 2 times the capacity provided by the electricity distribution company
• No relocation of the installation for five years from final payment
• Implementation of the project within 18 months from the effective date of the financing contract

Who is eligible for funding under the programme?

• Traders within the meaning of the Commercial Act or the Cooperatives Act, or be an equivalent person within the meaning of the legislation of a Member State of the European Economic Area
• Registered no later than 31.12.2019
• Size and capitalization criteria: Micro, Small and Medium Enterprises, Small Mid Cap Companies (up to 499 employees) and Mid Cap Companies (up to 1500 employees) are eligible for funding
• Group/Sector membership criteria:
• Industry Group in Sector B “Extractive Industries”, Sector C “Manufacturing”, Sector E “Water Supply; Sanitation, Waste Management and Reclamation” and Sector F “Construction” are financed.
• Services’ group is financed in Sector G Trade; repair of motor vehicles and motorcycles, Sector H Transport, storage and post, Sector I Hotels and restaurants, Sector J Creation and distribution of information and creative products; telecommunications’, sector L ‘Real estate activities’, sector M ‘Professional activities and scientific research’, sector N ‘Administrative and support service activities’, sector P ‘Education’, sector Q ‘Human health and social work activities’, sector R ‘Culture, sport and entertainment’ and sector S ‘Other service activities’.
• Enterprises in the ‘Agriculture, forestry and fishing’, ‘Electricity, heat and gaseous fuels production and distribution’, ‘Financial and insurance activities’ and part of the ‘Manufacturing’ (part of the ‘Manufacture of food products’ and ‘Manufacture of beverages’) sectors are not eligible.
• With realised net sales revenue for the financial year 2021 for:
• Micro-enterprise: ≥ BGN 80 000
• Small enterprise: ≥ BGN 187 000
• Medium-sized enterprise, Small mid-market company or Mid-market company: ≥ BGN 750 000
• The investment must serve the applicant’s main economic activity, according to the Classification of Economic Activities – NACE Rev. 2.2008

How can we support you?

Thanks to our partnerships with consultants, designers and contractors, Sonnis Energy offers you a complete solution for your solar project with European funding. We offer:

1. To inform you in due course of the date on which the funding programme will open for applications and of updates to the project selection methodology and criteria
2. To check whether your company is eligible for funding under the scheme and assess your project’s chances of competing for funding
3. Support you with the preparation of the application documents for funding
4. Prepare an investment project, technical design and financial analysis
5. To support you with the documentation drive for the construction of the photovoltaic system
6. To ensure the complete construction of your photovoltaic system

Components and budget of the procedure:

Component 1: Purchase of solar installations for DHW – BGN 12.8 million.
Component 2: Purchase of photovoltaic systems up to 10 kWp, including systems for
electricity storage – 67.2 million BGN.

Amount of funding:

Component 1: Purchase of solar installations for DHW – up to 100% of the cost of the installation, but not more than BGN 1 960.83.
Component 2: Purchase of photovoltaic systems up to 10 kWp, including electricity storage systems – up to 70% of the system cost, but not more than BGN 15 000.

Eligible costs:

• Purchase, supply and installation of solar DHW systems
• Purchase, supply and installation of photovoltaic systems up to 10 kWp (including on electricity storage system)
• Technical commissioning of the solar or photovoltaic installations purchase of fittings, cables, structure for installation of the installation, inverters, etc.
• Value added tax

Eligibility Criteria:

• Must be a natural person, a Bulgarian citizen, a citizen of another Member State of the European Union or a citizen of a third country with permanent resident status in the Republic of Bulgaria, occupying their own single-family dwelling or their own dwelling in a multi-family building.
• Is the owner of the dwelling applied for.
• The dwelling must be the applicant’s primary residence.
• The dwelling applied for must be located within the regulatory limits of the locality within the relevant municipality, must be used for residential purposes only and the address of the dwelling must not have a trader registered in the Commercial Register or a legal entity registered in the Register of Non-Profit Legal Entities.
• If the Applicant is the owner of a dwelling in a multi-family building, he/she must have the consent of the condominium and must submit a copy of the Resolution of the General Meeting of the Owners.
• The dwelling uses an inefficient source of heat (stove, boiler, fireplace, etc.) fired by solid fuel (wood, coal, etc.).
• The dwelling has consumed electricity for at least 6 months prior to the announcement of this procedure.
• A building permit has been issued for the construction of a solar installation for domestic hot water or photovoltaic systems up to 10 kWp.
• Submit a tender for the supply and installation of the installation or system, containing a proposal or documentation of the installation or system supplied and installed.
• Have paid the local taxes and fees due at the time of application for the property where the installation or system will be installed.

How can we support you?

Thanks to our partnerships with consultants, designers and contractors, Sonnis Energy offers you a complete solution to implement your solar project under the financing program. We offer:

1. Verify the eligibility of your plans for financing under the program
2. Support you with the preparation of the application documents for funding
3. Prepare an investment project, technical design and financial analysis
4. To support you with the documentation drive for the construction of the photovoltaic system
5. To ensure the complete construction of your photovoltaic system