Operation of a Photovoltaic Power Plant without a Zoning Decision and Its Legal Consequences

PV Plants up to 50 kW Without a Permit? When It's a Reality and When It's a Dangerous Myth

For a PV plant installation with a capacity of up to 50 kWp to be genuinely exempt from a building permit or notification, five key conditions set by the Building Act must be cumulatively met. Failure to meet even one of them automatically moves your project into a regime that requires the active involvement of the building authority.

• Does not interfere with the building's load-bearing structures: This is an often-underestimated point. It's not just about visible beams. An assessment of whether the installation will affect the building's structural integrity requires an expert opinion from a structural engineer. This step is absolutely essential to prevent fatal damage, especially for older industrial halls or roofs with large spans.

• Does not change the use of the building: This is a critical aspect for companies. Installing a PV plant for self-consumption is fine. However, if the primary purpose of the power plant were the systematic sale of energy and the building (e.g., a warehouse) were to de facto change into an energy production facility, the condition would not be met, and a change in the use of the building would need to be addressed.

• Does not require an environmental impact assessment (EIA): For rooftop PV plants up to 50 kW, meeting this condition is usually a formality, but it must be kept in mind, especially for projects near sensitive locations.

• Meets fire safety conditions: This is an area of enormous risk. This is not an optional recommendation but a strict obligation to comply with Decree No. 114/2023 Coll. It sets specific requirements for materials, safe system disconnection, or cable routing. 

• The building is not a cultural monument: Any installation on a building listed as a cultural monument or located in a conservation area is subject to a completely different, much stricter regime and requires a binding opinion from the heritage protection authorities.

It is crucial to distinguish where the PV plant is located. If it is installed on the roof or facade of an existing building, it is considered a "building modification" and may fall under the simplified regime mentioned above.

However, as soon as you build the PV plant on an adjacent plot of land, even within the same complex, it is considered a "separate structure" from a legal perspective. Such a project almost always requires at least a zoning decision (or zoning consent) and often a building permit, regardless of its capacity being below the 50 kW threshold.

Nevertheless, legislation is constantly evolving. Government-approved changes (sometimes referred to as Lex OZE III) plan to increase the limit for installation without a building permit from 50 kW to 100 kW, effective from 1 August 2025. However, the conditions (interference with structures, fire safety, etc.) will remain in force.

This dynamic creates a paradox. While the state is trying to accelerate the development of renewable resources, rapid changes in laws lead to confusion and create a "compliance gap." Companies hear about future simplification and may act prematurely according to rules that are not yet in effect. 

Relying on outdated information is a direct path to creating an unauthorised construction. Professional legal guidance that monitors legislation in real time is therefore a form of risk management.

Anatomy of an "Unauthorised Construction": What Happens When the Building Authority Knocks on Your Door

The term "unauthorised construction" is not just a technical term. Under the new Building Act, fully effective from 1 July 2024, it triggers a formal and high-risk process where a demolition order is a real and increasingly common outcome. The former leniency of the authorities is a thing of the past.

A fundamental change is that the new Building Act reverses the default position. Whereas previously the authorities tried to find a way to grant a retrospective permit, the standard procedure is now to initiate proceedings to have the structure removed. The burden of proof and the initiative to save the investment lie entirely with the owner.

This shift is part of a broader push by the state for compliance. On the one hand, legislation like Lex OZE I and II supports the rapid construction of PV plants, while on the other, the new Building Act severely punishes any wrongdoing. Companies are thus caught between two conflicting regulatory pressures – they are motivated to be fast but are punished more strictly than ever before for mistakes.

The process usually has the following phases, which every manager and business owner should be aware of:

• Initiation: It often starts with a complaint, which can be filed by a dissatisfied neighbour, a competitor, or may arise from the municipality's own inspection activities as part of a cadastral review.

• Inspection: Based on the complaint, the building authority conducts an on-site inspection to verify the actual situation.

• Initiation of removal proceedings: If the authority finds that the structure was built without the necessary permit, it is obliged to initiate proceedings for its removal. This is the critical moment when the bureaucratic machinery starts turning.

• 30-day deadline for a retrospective permit application: The law gives the owner a short window to apply for a retrospective permit for the construction. Missing this deadline is fatal – the structure can no longer be legalised in any way, and the authority will proceed with ordering its demolition.

From the moment the proceedings are initiated, the owner is no longer in control of the situation. The immediate involvement of a legal expert from ARROWS is crucial to protect your rights and to strategically manage all communication with the authorities. We are able to take over the entire process, from formulating responses to official requests to preparing a comprehensive application for a retrospective permit.

Building Law and Your PV Plant

The following table summarises the most common risks arising from violations of the Building Act and shows how the ARROWS law firm can specifically help minimise the damage.

Financial and Operational Impacts: More Than Just a Fine

Official fines are just the tip of the iceberg. The true cost of an illegally operated PV plant lies in a cascade of secondary financial impacts that can threaten not only the return on investment but also the overall stability of the business. Perceiving the risk merely as a potential fine is a fundamental strategic error.

First, the direct and easily quantifiable costs:

• Fines from the building authority: For constructing a building without a permit, the authority can impose a fine of up to CZK 2,000,000. If the structure is also located in a specially protected area (e.g., a Protected Landscape Area), the sanction can rise to CZK 4,000,000.

• Demolition costs: The owner of an unauthorised construction fully bears the costs of its removal. Depending on the size and location of the PV plant, this can amount to hundreds of thousands to millions of crowns. If the owner fails to comply with the order, the authority will arrange for the demolition through an external company and subsequently enforce the costs via execution proceedings.

However, the indirect impacts, which often manifest only when it is too late to remedy them, are far more insidious. A single violation of the Building Act triggers a "cascade of liability" that affects key areas of corporate finance:

• Insurance and reduction of claims: This is a critical point. The existence of an illegal structure is a gross breach of the property insurance contract. In the event of any insured event – even one not directly related to the PV plant (e.g., a windstorm, a falling tree, a fire in another part of the building) – the insurance company has the right to refuse the insurance payment or to reduce it dramatically. It will argue that the property was not in proper technical and legal condition.

• Inability to secure financing and collateral: No bank will accept a property with an unauthorised construction as collateral. This effectively blocks any attempts to refinance existing loans, obtain new operating loans, or sell the property to a buyer who depends on a mortgage. Your asset becomes illiquid.

• Loss of subsidies and obligation to return them: If the PV plant installation was co-financed by any subsidy programme (e.g., New Green Savings, OP TAC), the discovery of its illegality is a fundamental breach of the subsidy conditions. The subsidy provider will most likely demand the return of the entire amount paid, including a penalty.

Legal advice from ARROWS is therefore not just about averting a fine; it is a form of strategic risk management that protects the entire financial structure of your company and the value of its assets.

The Second Trap: Operation Without an ERÚ Licence and Unauthorised Overflows

Many companies successfully navigate the pitfalls of the building permit process only to fall into a second, often overlooked trap: the complex and strict world of the Energy Act. Operating a PV plant without the proper licence or a valid grid connection agreement is considered unauthorised business in the energy sector and carries its own, no less severe, sanctions.

Companies' in-house legal teams naturally focus on tangible assets and the building authority. However, energy regulation is a highly specialised area with its own rules and its own regulator – the Energy Regulatory Office (ERÚ). It is a parallel track of risk that cannot be ignored.

The obligation to obtain a licence for electricity generation from the ERÚ arises primarily in two cases:

• Installed capacity over 50 kWp: This is a fixed limit. Every PV plant with an installed capacity exceeding 50 kWp requires a licence, even if all the electricity produced is used exclusively for self-consumption.

• Business in the energy sector: Here lies a treacherous grey area. If the main purpose of your PV plant (even with a capacity under 50 kWp) is to systematically generate profit by selling electricity, it is considered a business, and a licence is required. The "occasional sale of surpluses" is generally not considered a business, but the line is thin, and the ERÚ assesses it very strictly.

Another major risk is the so-called "wild connection." Before the distributor installs a special four-quadrant meter at your consumption point, which can measure the flow of energy in both directions, any supply of electricity from your PV plant to the grid is considered unauthorised.

Moreover, older types of meters can paradoxically measure these overflows as your own consumption, thereby increasing your electricity bill. Even if this is not the case, the distributor has the right to charge high penalties for every kilowatt of unauthorised power supplied for each month that the overflows occurred.

The Path to Correction: How to Legalise an Unauthorised PV Plant

Legalising an unauthorised construction, known as obtaining a retrospective permit, is still possible even under the new Building Act. However, the path to it is narrow, steep, and requires absolute compliance with all applicable regulations. This is not a process a company should try to handle on its own; it is a complex legal procedure where professional representation is key to success.

It must be emphasised that there is no legal entitlement to a retrospective permit. The building authority will grant the application only if the construction meets all the conditions as if it were being permitted today from scratch. It is not possible to appeal to the fact that different, more lenient rules were in force at the time of construction.

To successfully legalise a PV plant, the following points must be met:

• Timely application: The application for a retrospective permit must be filed within 30 days of the notification of the initiation of removal proceedings.

• Compliance with the zoning plan: The construction must be in accordance with the valid zoning and planning documentation. This is a non-negotiable condition. If the zoning plan does not allow for the construction of a PV plant in the given location, legalisation is excluded.

• Compliance with all technical regulations: The project must meet all currently valid technical standards, including requirements for structural integrity and, especially, fire safety. This often requires additional modifications and investments.

• Securing consents: It is necessary to provide the consents of all affected parties, especially neighbours and utility network administrators.

• Payment of the fine: The new Building Act stipulates that a retrospective permit cannot be issued until the fine imposed for the offence (i.e., for the unauthorised construction itself) has been paid.

The legalisation process is our specialty. Our lawyers first prepare a legal opinion that realistically assesses the chances of successful legalisation. We then ensure the complete preparation of the documentation, from securing the project design to communicating with the relevant authorities. We will represent you throughout the entire proceedings before the building authority with the aim of maximising the chance of saving your investment.

ARROWS: Your Strategic Partner for Energy Projects in the Czech Republic and Abroad

At ARROWS, we understand that a successful energy project requires more than just a stamp from an authority. We are a strategic partner that provides comprehensive legal support covering the entire life cycle of your investment, backed by deep knowledge of the local market and a strong international network.

Our services go far beyond building and energy law. We routinely provide our clients with expert training for employees and management on regulatory obligations, prepare internal guidelines for the safe and efficient operation of PV plants, and handle the preparation and revision of all types of contracts, whether they are contracts with technology suppliers (EPC), service organisations (O&M), or energy off-takers (PPA).

Our experience is built on long-term cooperation with a broad portfolio of clients, which includes more than 150 joint-stock companies, 250 limited liability companies, and 51 municipalities and regions. This diversity gives us a unique insight into the needs of different types of organisations and allows us to provide tailor-made services, always with an emphasis on speed and the highest quality.

Given that Czech energy legislation is heavily influenced by EU directives, our ARROWS International network, built over ten years, is an invaluable advantage. We handle cases with an international element on a daily basis and understand both local specifics and the broader European context.

We believe in the power of connection. That is why we actively connect our clients when we see synergies for interesting investment or business opportunities. We are partners in your growth and are happy to listen to your business ideas as well.

Invest with Confidence. Leave the Legal Risks to Us.

The legal environment for photovoltaic power plants in the Czech Republic is complex, dynamic, and full of hidden risks. As this article has shown, a single misstep – whether it's failing to meet a condition for construction without a permit or overlooking a licensing requirement – can trigger a cascade of financial and operational disasters that far exceed the amount of the original fine.

Proactive legal planning and thorough preparation are not an expense, but the most effective form of risk management and protection for your investment.

Are you planning an investment in a PV plant, or are you unsure whether your existing operation meets all legal requirements? Don't wait for the building authority or the ERÚ to contact you. Contact us today. The team of experienced lawyers at ARROWS is ready to audit your project, identify risks, and ensure that your investment in clean energy is not only profitable but also legally sound.