Montenegro slashes VAT on solar panels to 7%

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Mico Djukanovic, the president of Montenegrin utility Elektroprivreda Crne Gore (EPCG), said on his Twitter account this week that the VAT on solar panels has been reduced from 21% to 7%.

The new measure will apply to all PV systems up to 1 MW in size. Djukanovic said the new measure will reduce project costs by around 12%.

EPCG and the Montenegrin Ministry of Ecology, Spatial Planning and Urbanism kicked off a net-metering program for rooftop PV in July 2021. A few months later, Investiciono razvojni fond (IRF) – the Investment and Development Fund of Montenegro (IDF MN) – and the United Nations Development Programme (UNDP) launched a financing support program to help farmers and small- and medium-sized enterprises to deploy rooftop PV solutions.

According to the International Renewable Energy Agency, the country had installed just 7 MW of solar power at the end of 2021. Most of Montenegro’s electrical power demand is currently met by the 225 MW Pljevlja thermal power plant in the north of Montenegro and two large hydropower plants, at Perućica (307 MW) and Piva (363 MW).

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