Conditions of Electricity Generation
A solar project begins with Article 32 of the Georgian Law on Energy and Water Supply: the construction, maintenance, operation of electricity generation objects and associated devices, and their connection to the transmission and/or distribution network, must comply with the technical standards, norms and other mandatory conditions established by Georgian legislation, including the rules of the transmission and distribution networks, together with requirements related to the environment, public safety and the protection of property. Electricity generation, save for the exceptions envisaged by the law, is subject to mandatory licensing under the Law on Licenses and Permits, this law and the licensing rules approved by the Commission. This means that a large array of solar panels working for sale to the network must first satisfy technical compliance and then pass through the licensing regime. Environmental, public safety and property protection requirements are separately emphasized in this list, because a solar project occupies a large territory and its siting also affects the rights of neighbors.
The Rights of the Electricity Producer
Article 33 of the law defines the powers of the producer: to generate electricity by means of the object accepted into operation and the energy source indicated in the license conditions, in compliance with the relevant license, the technical characteristics established by legislative acts and the requirements related to environmental protection; to conclude contracts on the purchase and sale of electricity in compliance with the conditions established by this law and the electricity market rules; to conclude contracts on balancing and the provision of ancillary services under the conditions established by this law and the relevant subordinate normative acts adopted on its basis; to have access to the transmission and/or distribution system in accordance with this law, the network rules and other legislation; and to enjoy other rights provided by Georgian legislation. For the owner of a solar project this catalogue means that the sales format, balancing contracts and network access are all resolved within one and the same legal frame. It is noteworthy that the right to generate is tied to the object accepted into operation and to the energy source indicated in the license conditions — the enterprise must generate energy precisely with the source fixed in its license. Purchase and sale contracts are shaped by the market rules, while balancing and ancillary service contracts rest on the law and subordinate acts adopted on its basis, so the freedom of negotiation remains within that frame.
Acceptance into Operation: Trial Run and Complex Testing
After the construction or reconstruction of the solar plant object, the increase of its capacity and its connection to the network, the enterprise applies to the transmission or distribution system operator for the trial run and/or complex testing; representatives of the transmission system operator participate in the process. The testing and the consent are carried out under the network rules, and unless those rules provide otherwise, the operator declares consent or refusal within no more than 90 calendar days from the trial run. During this period no generation license is required, and the purchase and sale of the electricity produced is regulated by the electricity market rules; once the object has been accepted into operation, generation is allowed only on the basis of a license or, in the cases envisaged by the law, a confirming document issued by the authorized organ. The procedure thus consists of three steps: construction and connection to the network in compliance with the technical requirements established by legislation; application to the operator for the trial run or testing with the participation of its representatives; and the final stage — full operation on the basis of a license or confirming document. The legal regime of each stage differs, and confusing them in practice is a source of errors.
Generation Support and Support Mechanisms
Article 37 shapes the support regime: it is transparent and non-discriminatory, resting on economic expediency, the minimal costs of the final consumer and the criteria of influence on the balance and the operation of the system. Generation from renewable sources and high-efficiency cogeneration may be encouraged through support mechanisms — to reach the level established for Georgia by Energy Community legislation. The rules cover the mechanisms, the rights and obligations of enterprises and the regulatory requirements, and every measure must be justified in conformity with competition and state aid law. In planning a solar project it is from this frame that one must establish which form of support is available and what conditions are attached to it. The three basic conditions of support — transparency, non-discrimination and the minimal costs of the final consumer — are at the same time the criteria by which the lawfulness of any concrete mechanism is assessed. Incentives are possible only insofar as they serve to bring generation up to the Energy Community level, and cannot become an instrument of gratuitous subsidization. Solar energy is recognized within this frame as a renewable source and, alongside cogeneration, it is precisely solar that may become the addressee of incentive mechanisms. From the regulator's perspective support is a two-sided construction: it creates the producer's right and obligation at once, and departing from its conditions entails sanctions.
Frequently Asked Questions
Below are frequently asked questions about solar projects.
Does a solar plant need a license?
Yes, apart from statutory exceptions; during the trial run and complex testing none is required.
Within what term is consent to acceptance into operation declared?
Within no more than 90 calendar days from the trial run, unless the network rules provide otherwise.
Can the generated electricity be sold?
Yes — the producer may conclude purchase-sale contracts under the market rules.
How We Help on Legal.ge
The Legal.ge team accompanies solar projects at every stage: we assess licensing needs, prepare connection and acceptance documentation, and structure purchase-sale and balancing contracts. Contact us — we will review your project and map the legal plan.