For several years now, Lithuania has had a scheme in place that allows small solar power producers to use the electricity grid as if it were a massive free battery. In practice, this means that if a solar producer feeds, for example, 10 kilowatt-hours of electricity into the grid during the summer, they can later use that same 10 kilowatt-hours — even in winter or at night.

On one hand, the scheme has led to a significant increase in the number of solar parks in Lithuania. On the other, it has also sharply increased the number of hours, especially in summer, when electricity prices in the Baltic region are zero or even negative.

Electricity retailers operating in Lithuania are currently facing difficulties. In the summer, they are forced to sell excess solar energy at very low prices, while in the winter they must buy back the same amount of energy from the market at much higher prices, as they are obligated by law to compensate solar producers participating in the scheme.

Tiit Hõbejõgi, a member of the management board at Eesti Energia subsidiary Enefit, said that several smaller electricity retailers have already exited the Lithuanian market, leaving only the larger players.

Enefit itself posted a €25 million loss in Lithuania last year due to the scheme.

Since the fall, Enefit has stopped actively offering new electricity packages to customers in Lithuania and is looking for ways to reduce its losses.

"If active sales are halted, then in the long term it means that if the situation continues, we will not continue selling. This concerns the private customer segment where we have stopped sales. If the portfolio runs empty over the next few years, we will also exit the market," Hõbejõgi said.

However, Enefit does not plan to legally challenge the Lithuanian scheme.

"Since we want to continue energy production there in the future, we cannot burn our bridges completely," Hõbejõgi added.

When electricity prices are low in Lithuania on sunny days, prices are also lower in Estonia. According to Hõbejõgi, this results in direct losses for Estonian solar energy producers.

Ingrid-Helena Ilus, an energy markets expert at Sunly, also said that Estonian consumers benefit from the Lithuanian scheme while implementing a similar scheme in Estonia would not be reasonable.

"The only purpose of the scheme at the time was to accelerate the construction of solar parks. In Estonia, there is no longer a need to subsidize this because someone ultimately has to pay for it — and in the end, it's the consumer," Ilus said.

Sunly itself is developing the largest solar park in the Baltic states in Risti, with an investment exceeding €120 million.

Ilus added that they have not abandoned this plan and that the Lithuanian scheme does not directly affect them to the same extent.

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