Kosovar citizens and businesses are turning towards sustainable energy solutions, following the trend of embracing renewable resources. However, long bureaucratic procedures are making this transition difficult.

Coal is still Kosovo’s primary source of electricity production, despite a global trend of countries committing to phasing out coal in their efforts to combat the climate crisis. In Kosovo, coal accounts for 90% of total energy production, whereas only 7.9% is from renewable sources such as wind and solar.

The transition from coal to renewable sources is progressing slowly due to lengthy bureaucratic procedures. This also makes it difficult for the Government of Kosovo, headed by the Ministry of Economy, to fulfill its goal of having 35% of electricity consumption be from renewable sources by 2031. 

The number of licenses approved by the Energy Regulatory Office (ERO) shows a growing number of consumers who want to produce renewable energy for themselves. Although today there are many examples of this, the use of renewable resources in Kosovo does not have a long history.

In Kosovo, the company Elen Solar, owned by Lulzim Syla and his brothers, Afrim and Avni, is a pioneer in the renewable energy sector. With over 30 years of experience in house and building electrical installations, they have always followed market trends by attending electrical fairs. Such fairs helped them be in step with current developments and introduced new ideas.

“I visited fairs everywhere and saw that a new time for solar energy was coming. In fact, it was already happening in Europe. So, I said to myself, we’ll start working with this too,” said Syla. He started encouraging the company to work with solar energy 10 years ago. 

As an economist by profession, Syla took on the responsibility of the company’s strategic growth planning. In his projections, he began to allocate budget, time and investment towards developing solar energy using photovoltaic panels. These rectangular panels contain photovoltaic cells and are positioned to capture sunlight effectively. When these cells are exposed to sunlight, it causes electrons to break apart and move. This movement of electrons generates voltage, which in turn creates electricity.

This technology was discovered in the 1970s in the U.S. and became widely used after significantly reducing the cost of electricity. In 1999, Germany launched a $500 million program called 100,000 Roofs Solar Power. By 2007, global investment in clean energy surpassed $100 billion, with solar emerging as the primary technology within the clean energy sector.

The Elen Solar Company started investing in solar energy between 2012 and 2013. However, despite Syla’s enthusiasm, challenges arose due to the unfamiliar landscape for this type of energy in Kosovo. Local institutions did not have detailed regulations and many challenges awaited the company. 

“We had to push the process forward ourselves. Sometimes it was easier, sometimes it was harder. We had to sit down and talk with KEDS [Kosovo Energy Distribution Services] and with the ERO. It was only between 2017 and 2018 that it became possible for KEDS to accept our surplus of electricity,” said Syla. These developments paved the way for further investment in solar energy. In April 2017, the ERO issued the Rule on Authorization Procedure for the Construction of New Capacities from Renewable Energy Sources. 

Kosovars are ready for new technologies but institutions are not

Although he had convinced himself and his brothers to start working with solar power, Syla did not know what awaited him in the market and whether anyone would be interested in installing solar panels. 

“It was very interesting for people. When you talked about solar, whether in a coffee shop, at fairs, on social media, on television, people received it well. They saw it as something big that is coming,” said Syla, adding that the cost of investment around 2012 and 2013 was several times higher than today and so people hesitated to invest. However, the price of electricity at that time was much lower than today.

Because of this, a push was needed for households and companies to start investing in solar energy. In this context, the European Bank for Reconstruction and Development (EBRD) started the Kosovo Sustainable Energy Projects Framework (KoSEP) in October 2023, with 12 million euros of its own and three million euros from the Office of the European Union in Kosovo. The project’s technical aspects were supported by the Norwegian government.

The framework was designed to encourage small and medium enterprises and households to invest in energy-efficient technology and sensible energy consumption. It called for the EBRD to provide loans to participating financial institutions, which then would provide loans to local lenders.

Participating banks and microfinance institutions benefited from expanding their range of services. Additionally, bank interest rates decreased, due to the support from the EBRD. According to Syla, this encouraged more interest in investing in solar energy.

But he will never forget the feeling when he first sold a solar panel system, to a farmer who had won a grant from the Ministry of Agriculture and decided to invest. “Actually, it was a fantastic feeling because when we sold it for the first time, we sold it at a minimal price. Just to sell it and promote it. We stayed happy all week because we reached a milestone,” he said, adding that in the beginning they were a small team.

According to Syla, the current price for installing a six-kilowatt (kW) capacity system is 7,500 euros. The company’s team now consists of 55 individuals, who oversee the entire process of transitioning to solar energy, from planning to issuing necessary documents to commissioning solar energy systems.

The Elen Solar Company also transitioned the Interex supermarket in Peja to solar energy. Today, over 1,000 panels turn the sunlight that falls on Peja into electricity. On the roof of Interex’s facility, 1,367 solar panels occupy 2,732 square meters, an area that reaches a capacity of 750kW of electricity.

“At Interex, we have seen the importance of investing in solar energy. We have decided to install solar panel systems for generating electricity in all our current and future selling locations,” said supervising architect at Interex Selajdin Kelmendi, who was directly involved with this project, which was completed in the second half of 2022.

Interex’s bills for the large amount of energy used for refrigerators, lighting and air conditioning has significantly decreased. Interex now pays 50% less for electricity annually than it used to.

The system Interex installed is known as On-Grid. The energy produced is used for the facility’s needs, and surplus energy enters the energy distribution network, operated by KEDS. Excess energy is then fed into the grid and can be reclaimed when required.

However, transitioning to this type of energy generation is neither quick nor easy.

Bureaucratic procedures slow the transition to sustainable energy

Institutional approval for the installation of photovoltaic panels on the roofs of houses or businesses typically takes a month or longer.

The extensive paperwork and documentation involved in transferring information from one institution to another has prompted many companies that install solar panels, such as Elen Solar, to offer to complete the paperwork for their customers. They offer to carry out all procedures up to the installation.

ERO authorization is needed to install solar panels, even as an individual. 

According to the 2022 ERO regulation, citizens must provide evidence of annual energy consumption, annual kWh production estimate, an agreement with the system operator and the municipality’s consent for the installation, if required by relevant construction legislation.

When it comes to companies, procedures tend to be longer and can involve as many as 13 steps. These steps include gathering documents about the company’s board, technical and financial feasibility studies, and other documentation. This is necessary in cases when energy production will exceed 1MW.  

Syla was one of the first to influence institutions to simplify these procedures. He also leads the Renewable Energy Cluster at the German-Kosovar Business Association. Through persistent requests, Syla, together with others that work in the sector, managed to influence the Ministry of Environment, Spatial Planning and Infrastructure (MESPI) to remove the requirement for obtaining a construction permit for the installation of solar panels.

On September 5 of last year, Liburn Aliu of the MPHI announced that citizens are no longer required to obtain construction permits for the installation of photovoltaic solar panels for personal consumption. This applies to installations with capacities up to 7kWh. However, Syla said that this is only a small step compared to what could be done, adding that the buildings where solar panel systems are installed must be legally approved with a construction permit. Otherwise, investors cannot obtain consent from the relevant municipality, which they need in order to apply for the installation of solar panels.

“In Kosovo, there are more than 350,000 buildings built without permission. Almost every village has houses that are built without permission and those houses are connected to the sewerage system, to the water supply, they are supplied with electricity and they also pay tax. But [personal consumers] need the building to be legally approved in order to install solar panels. It seems absurd,” said Syla, indicating that businesses still use the old rules for building permits. 

While Syla acknowledges the need for such a permit, he suggested that this process could be carried out more efficiently online by entering the data into a system. However, he added that the institutions have been making progress.

“Once all this was unknown to municipal officials and central institutions. We had cases when we had to go to different offices for months. Now it’s more clear and it works better,” he said, adding that the ERO is the main institution that can make a difference.

“But for anything that is 1kW, the ERO’s board must gather to vote and approve,” he said.

The renewable energy targets set by the Government of Kosovo until 2031 aim for 35% of the country’s energy to be generated from renewable sources.

The Kosovar Government, through the Ministry of Economy, has opened the first auction for solar energy systems with a capacity of 100 MW. The auction will be open until the end of January 2024 and then the winner will start construction in the village of Kramovik, Rahovec.

The auction will provide investors with the assurance of a fixed energy sale price for 15 years and administrative procedures will work with government agencies and land insurance at no additional cost. The winner is expected to be the company or consortium that offers the lowest guaranteed energy purchase price.

Feature Image: ElenSolar’s archive.

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