Hungary to turn solar panel regulation upside down - minister
Changes in solar panel rules
There is more energy connection demand than the grid can absorb. Therefore, the rules need to change, said Gergely Gulyás, Prime Minister Viktor Orbán's chief of staff, at a press conference on Thursday.
Until now, those who have fed power into the main grid have been taken in by the supplier, he said, describing the essence of the current system, which is called "balancing" accounting system.
We will make changes in the context of unregistered claims. As we lack connection capacity, we will suspend the possibility of feeding it in,
he outlined the essence of the change to the solar accounting rules.
For those who install solar panels thereafter, the rule changes. Those can only use the energy in their own household, he explained. You don't need as many permits, there will be less red tape," added Gulyás.
If the grid upgrade is carried out with EU funds, then capacities will be allocated again.
This amendment now applies to households and businesses that generate energy for their own use,
he added.
The reason is that the current grid has no further connection capacity, he added.
The new changes do not apply to power plants, he stressed.
Pummelling of forint will end
The government will do what it can [to thwart forint easing]: a balanced budget and a reduction in the trade deficit, he said in response to a question about the limit in the forint's exchange rate at which the government would intervene.
The forint weakened more because the energy intensity of the Hungarian economy is higher,
Gulyás said.
The deferred payment for gas will support the exchange rate, he predicted.
The deferred payment for Russian gas will not restore the external balance of the Hungarian economy, and it is a mistake to think that it will reduce the current account deficit. Nevertheless, the gas price threshold (strictly from an economic point of view) has some benefits, it improves the financing situation a little, but more importantly, by spreading the shock over time, it can provide a kind of insurance against possible further price surges in the next six months.
To mitigate the impact of global prices, the Hungarian MVM Group and Russia's Gazprom have agreed on a deferred payment for the winter period ahead. This means that Hungary will pay a maximum threshold price for gas for the next six months, and as long as the market price is above this price, the Russian side will lend Hungary the excess purchase price, which will have to be repaid over three years.
The exact parameters are not public, but partial information we have gives a relatively accurate picture: the threshold price is around EUR 140-150/MWh, the interest rate on the loan is around 3.5%, and over the three years Hungary can repay the debt at a rate of 20-40-40% per year.
Teachers' pay rise
The Commission has taken a constructive approach to the negotiations on the increase in teachers' salaries. By 2025, teachers will be able to earn 80% of the graduate salary. Next year, teachers' salaries will have to be increased by around 20.8%, then by 25% compared to the current base, and in 2025 by almost 30% compared to the current base, the minister explained.
The average graduate salary is estimated to reach HUF 972,000 in 2025, Gulyás said later on. And after the government's commitments, the average salary of a graduate teacher could be HUF 777,673, he said.
Gulyás also shared the government's forecast for the average graduate salary: in 2022, it could rise by 16.7%, in 2023 by 10.2%, in 2024 by 8.8% and in 2025 by 8.5%, reaching HUF 972,000 by 2025.
Teachers in disadvantaged areas could see bigger raises, with average teacher salaries reaching up to 90% of graduate salaries.
We are now linking the increase in teachers' salaries to something completely different under the agreement with the Commission,
the minister replied to a question, suggesting that the teacher pay rise will have a new system and will not be linked to the 2014 minimum wage.
He later clarified that under the agreement with the EU executive, teachers' salaries will be linked to the general graduate salaries.
The average teacher's salary is currently 400,000 forints.
Wow, that's a lot to process. Today is not one of the most lucid days Gulyás has ever had for sure. He was also coughing a lot, maybe he is coming down with something.
First of all, teachers' pay has nothing to do with Hungary's current struggles to unblock EU funds, with the Commission proposing to suspend 65% of the allocations from three operational programmes (environmental protection, transport, and regional development) to the tune of cc. EUR 7.5 billion and funds from the yet-to-be-approved National Recovery Plan (grants and loan funding worth about EUR 5.8 bn in the Recovery and Resilience Facility or RRF).
Secondly, the numbers do not add up. Gulyás kept saying "compared to the current base". However, if we raise teachers' average salary (HUF 400,000) by the figures the minister provided (20% next year, 25% in 2024 and 30% in 2025), we get HUF 700,000 three years from now.
The only way the average pay will reach the HUF 777,000 Gulyás mentioned is if we apply the aforementioned raises every year on the new (higher) average wage and so teachers will be paid HUF 480,000 on average in 2023, HUF 600,000 in 2024 and HUF 780,000 in 2025. Thus it is really confusing why Gulyás emphasised that the hike will be "compared to the current base". We should learn more later on, though.
We need to raise teachers' salaries as quickly and as much as possible, but the government wants to cover this from the stuck EU funds,
Gergely Gulyás said.
Interesting. This may be the first time a government official says the cabinet wants to pay higher wages for teachers from the blocked EU funds instead of saying it could finance the hike only with that money.
RRF loan also needed
A concrete government decision has been made that the government would still like the loan part of the recovery fund.
Gas enough for six months
Sufficient energy resources are available in Hungary. The country's gas supply is guaranteed for half a year even in the event of a supply disruption.
If an agreement is reached with the Commission, the government will use part of the recovery fund credit for the green switchover and the development of the electricity grid. The aim is to enable the grid to accommodate more green energy, Gulyás explained.
In response to a question, the minister said that the amount of gas stored for others is also included in the storage capacity, including the 500 million cubic metres of gas that the government is storing for Serbia.
What's to blame for skyrocketing inflation and a record weak forint?
Gulyás blamed high energy prices, the EU's sanctions against Russia, and Hungary's proximity to the war (Ukraine) for high inflation.
He attributed the weakening of the forint (it hit all-time lows versus both the euro and the USD) also to the negative impact of high energy prices. Hungary's energy intensity is high, so energy bought from abroad is a big part of our external trade balance, so we have to buy euros and dollars, he explained.
If there were no sanctions, the forint would strengthen, the minister said. If energy prices were to drop, the forint would react in the same way, he added.
What do we want? EU funds!. When do we want them? Now! Or... at your earliest convenience perhaps...?
There is no Plan B for the government to get EU funds in the sense that these funds are ours, it is the compensation for paying membership fees and opening up our markets.
One way or another, Hungary must get these funds,
Gulyás said.
He added that, at the same time, the government always has the possibility to get funding from other sources, and it will use it.
Prime Minister Viktor Orbán has already said that and then Tibor Navracsics, minister responsible for the use of EU funds were quick to stress that Hungary has no Plan B, it wants to learn about and fulfil new conditions the Commission may put forward in exchange for the funds.
Our reconstruction plans (NRP) have been ready for a year and a half, but they have not been accepted for political reasons alone, said Gulyás.
That political reason he was referring to is multiple rule of law violations that made the EU executive propose to withhold funds in the first place.
More to follow!
Cover photo: MTI/Zoltán Balogh
