Tax checks hit wind owners with bills for excess green power

Nearly 2,000 private owners of wind turbines and solar panels have been ordered to repay electricity tax discounts after producing more power than allowed, DR reports. The cases have caused frustration and confusion among owners and politicians.

One of those affected is Nils-Jørn Krejberg from Lemvig, who received a bill for DKK 10,000. He said he initially assumed it was a mistake because his approved household wind turbine had not exceeded six kilowatts in capacity.

Krejberg bought the turbine from THYmøllen 14 years ago, both as an investment and to support the political goal of increasing green power production. His turbine was covered by a tax scheme requiring household installations to have a combined maximum capacity of six kilowatts.

He now faces a large bill, a less profitable turbine and the loss of the settlement scheme that originally made the investment attractive. Krejberg said his turbine had exceeded the limit only slightly, producing no more than 10 extra kilowatts in total over the period and doing so for just a few minutes.

He said he had acted in good faith and could not have done anything differently to avoid the bill. The turbine was approved under the legislation, he said, and the rules had not changed since he bought it.

About 85,000 private solar installations and wind turbines joined the net settlement scheme between 2010 and 2012. The scheme allowed owners to pay electricity tax only on their annual net consumption, meaning the difference between the electricity they used and the electricity they supplied to the grid.

The Danish Tax Agency last year checked whether the installations had produced more than permitted, using data from Energinet’s DataHub. It identified 1,989 installations that had exceeded the maximum production limit and supplied too much electricity to the public grid.

The owners must repay the electricity tax they saved and are excluded from the favourable net settlement scheme. The repayment is collected from their electricity supplier.

The owners cannot appeal the cases themselves because the Tax Agency does not consider them parties to the proceedings. The parties are the Tax Agency and the grid company.

The net settlement scheme was closed to new users in November 2012. Parliament protected the scheme for 20 years in 2012, meaning it will expire in 2032.

Freddy Nielsen, sales manager at THYmøllen, said he was as puzzled by the sanctions as the owners. He described the matter as a storm in a teacup and said it was unreasonable to treat a turbine producing a few per cent too much as a problem when more green electricity is needed.

He explained that varying wind and weather conditions can cause the turbine to produce more than the six kilowatts for which it was approved. When it reaches maximum production, it is supposed to slow itself down, but that can take a few seconds, during which it produces excess electricity.

The six-kilowatt THYmøllen turbines are stall-regulated, meaning that the shape of their blades causes them to slow down when they reach a certain speed.

Mads Fuglede, energy and climate spokesperson for the Denmark Democrats, wants the tax bills cancelled and the owners returned to the settlement scheme. He said the breaches were minor and argued that the owners should be thanked for producing green electricity during an important period of electrification.

Fuglede has asked the Ministry of Taxation and Growth several questions and said it should overlook the owners’ breaches. Tax Minister Jakob Engel-Schmidt said he understood that it could seem unfair and rigid when even minor breaches lead to demands for additional tax payments. He did not mention any possibility of changing the repayment demands.