Response to interpellation 2023/24:388 on batteries with green deduction for stabilizing the electricity grid
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns the Swedish Tax Agency's interpretation of the green deduction for batteries, where the authority requires that batteries must exclusively be used to store self-produced electricity 1 2. MP argues that this is problematic as batteries can also be used to stabilize the power grid and sell support services, which is a growing trend 3. MP advocates for a swift proposition to clarify the law and avoid legal proceedings 3 4 5. M responds that the Ministry of Finance is analyzing the consequences 1 2. M argues that it is better to let the interpretation be tested in court before a new proposition is written.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Linus Lakso has asked me if I intend to take the initiative for an amendment to the Income Tax Act, so that home batteries can also be used for support services, peak shaving, and other useful purposes, such as stabilizing the electricity system.
The question is posed against the background that the Swedish Tax Agency, on 25 January, published a position regarding the agency's interpretation of the provisions on tax reductions for the installation of systems for storing self-produced electricity within the framework of the tax reduction for green technology. The Swedish Tax Agency's view is that it is required that a battery must be used exclusively or almost exclusively to store self-produced electricity in order for the tax reduction for green technology to be granted. The position applies to preliminary tax reductions requested for the income year 2024 or later.
As I have stated in previous answers to Linus Lakso, it is the Swedish Tax Agency, as the implementing authority, and ultimately the administrative courts that interpret the meaning of current legislation. The Ministry of Finance is now analyzing the consequences of the Swedish Tax Agency's position.
Linus Lakso (MP)
Madam Speaker! Thank you, Finance Minister Elisabeth Svantesson, for the answer!
I want to start by trying to describe a bit why this is an important issue. First and foremost, we have a broad consensus in the Swedish Riksdag that electrification is an important path to meeting the climate goals. Then we will also need more energy storage as we get more variable production, regardless of what mix one considers it should be in the end.
Batteries have a very good ability to contribute to stabilizing the power grid. The Riksdag has previously decided that it wants to support this through a green deduction for home batteries that one can complement their solar cell system with. These can then be used in several different ways. One can store their solar power to use it at night or when the sun is not shining. They can also be used to store electricity when the price is very low, for example when it is very windy, to use at a later time. In this way, one contributes to supporting the electricity system.
Then there is a third way. It is to sell so-called support services to Svenska kraftnät, which has traditionally had the task of stabilizing or balancing the electricity system, where previously, above all, large energy companies have been involved, and to invite hydropower and other flexible power sources.
With this development, more and more people have chosen to install home batteries and utilize the green deduction. Here we see a completely new trend in the energy system, where private individuals are involved in selling support services directly to Svenska kraftnät. This is a smart use of resources when it comes to batteries, which can therefore be used for several different purposes. It has become very popular.
But the Swedish Tax Agency has now come up with a new interpretation, which becomes very problematic. It puts an entire industry and many private individuals in a difficult situation. One does not really know how one is allowed to use one's battery. This risks locking away a great deal of utility. We have, after all, allocated tax funds to support this development, and then we say that the batteries may only be used for an extremely limited part, when one could actually do much more with them.
Now the authority has made this decision. If nothing is done from the political side, it may perhaps be tested in court. But I mean that it would probably be unfortunate to wait in this case. There are two things that speak for this. One is that we need a rapid energy transition, and we must accommodate that people want to be involved and contribute to it. One should not feel that they receive a penalty kick for having tried to do good here. The other concerns the use of tax money and the state's resources. To take this to court would be to let it sit on the back burner. If we are now in agreement that one should be able to use the batteries in a smart and resource-efficient way, it would be fastest if the government took the initiative for a government bill to clarify the law.
Then one can absolutely discuss what level of support should apply going forward, if one thinks that it is too generous given that batteries have become cheaper. It is not something I close the door on. But my question to the Minister for Finance remains: Is the government prepared to try to solve this issue in a smooth way both for private individuals and for an industry that needs long-term and stable conditions to be able to continue to develop in a positive way?
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Thank you once again to Linus Lakso for the question. It is important and engages many. Just as the interpellator says, it is gratifying to see how so many in Sweden want to be involved, contribute, and transition. Swedish companies have led the way for a long time and are very proactive, but Swedish households also want to contribute in every possible way. The green deduction is an important way to be able to transition.
We need to transform the entire society so that more people can invest in solar cells, charging stations, and electricity storage. In that regard, the tax reduction for green technology has an important role to play.
What we are discussing now is that we, just over a week ago – it is good that the interpellor is quick – were informed that the Swedish Tax Agency does not allow this deduction when the batteries are used for something other than storing self-produced electricity. One can, for example, imagine that they are to be leased to Svenska kraftnät so that they can balance the power grid.
Fundamentally, this is an effect of the fact that technological development has moved very fast. The legislation was submitted by the previous government in 2021, and it has probably not quite kept pace with the technological development. No shadow should be cast over the previous government, but it simply moves very fast. That is why I answer as I do.
Now we are analyzing at the Ministry of Finance what this implies. We will return. In what way it is too early to say now. There are different paths, which the interpellor is also touching upon. The starting point is that this can be tested in court, naturally.
I am not closing any doors. We are analyzing the situation and will return to the matter. But it has only been just over a week, so I must ask the members to have some patience with the process.
Linus Lakso (MP)
Madam Speaker! Thank you very much, Minister for Finance, for a positive answer!
The Minister for Finance is absolutely pressing on something important here, that we need to be quick from the political side. We seem to be somewhat in agreement on this. I have been very attentive and quick because I have received clear signals from people I have spoken with in the industry and from people who have installed home batteries. People are very worried about what is going to happen.
It is also an industry that is very pressured. We had very high demand for solar cells during Russia's energy war. Since then, it has been a bit shaky. Added to this is the great uncertainty regarding batteries. It is also about private individuals' confidence in the policy - one wants to be part of the transition and not have to feel that one is being punished when one has tried to do something good.
These factors make it very urgent to be quick in sorting this out. Sometimes it can be more or less complicated to sort things out. In this case, I do not think it would be very difficult. I believe it would suffice with a fairly quick and short proposition from the government that clarifies this. I welcome and am pleased to hear that the Finance Minister does not close such doors.
I guess it is difficult to get an exact timeline, but I still ask the question: Does the Finance Minister have any timeline for this? I believe it is important for many people and companies to get some kind of indication of what timeframes we are talking about, if the government intends to take an initiative forward.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! It is exactly as the interpellator says. Now there are differing opinions. Different interpretations are being made of this legislation. Then one can always think like this: If we change quickly, it will be better. It can also be that it went too fast when that bill was submitted so that it turned out this way - that one did not take technology development into account.
The starting point is always that the best way is to go a path where the interpretation is tested, because different assessments are made. That is the basis we have. I do not rule out anything else, but the best is that it is interpreted. It could be that one interprets in favor of the industry and not in favor of Skatteverket – we do not know that today. And in that case, it is very unnecessary to rush off and write a new proposition. This is my main entry point.
But even if this is a small part, it is a very important part. It is, therefore, small in the sense that we do a lot in this area, but it is an important part for many. It is an important part for the industry but also for households. And fundamentally, we shall facilitate the transition. We shall facilitate for people to transition and encourage what we believe in. The Government and all Tidö parties also believe that incentives are important. We need to produce more electricity. We need to save electricity, and we need to transition together to meet our climate goals.
Fundamentally, I believe that we share the assessment that this is an important part. Then, I am not as certain as the member that one should quickly draft a new proposition before one truly knows what this means. Therefore, I want to wait.
Linus Lakso (MP)
Madam Speaker! I thank you again for the answer. I would, however, still like to emphasize that I believe it would be better to reach a conclusion quickly on this issue for the reasons I have already mentioned. I do not believe at all that it is incredibly difficult to achieve a clarification here that one should actually be allowed to use this for more purposes. I want to advocate very strongly for this. And I want to convey to the Minister for Finance that I believe this is the right way to go. I also hope that is where one lands.
In other respects, I would like to thank you for a constructive and good debate.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I have nothing further to add, but I also say: Thank you for the debate!
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.