Prof. Malka outlines the long-term strategy for PV expansion in Albania, highlighting a shift toward auctions for large-scale solar, stable mechanisms for mid-sized projects, and growing potential for hybrid solar–hydropower systems with battery storage. ©Malka
In the third interview, Professor Malka discusses Albania’s energy market liberalisation, highlighting solar investments, subsidies, and the urgent shift from hydropower to solar amid climate challenges.
Munich, 21. November 2025
What is the current situation with subsidies for solarenergy in Albania?
During this transitional period, which may last up to twelve months, the Renewable Energy Act allows the temporary application of existing secondary legislation based on the previous law. According to Act No. 24/2023, “Promotion of the Use of Renewable Energy Sources”, support mechanisms may be implemented as Power Purchase Agreements (PPAs), Contracts for Difference (CfDs), and Premium Agreements.
How does the law address stored energy?
Law No. 24/2023 stipulates that electricity from priority producers, which has not yet been fed into the grid but is temporarily stored in their facilities, is considered delivered and is eligible for subsidies at the time of planned grid feed-in.
Albania’s geographical location is ideal for photovoltaics. Should investments be booming?
Solar irradiance in Albania is among the highest in the Western Balkans, particularly in the regions of Fier, Vlora, Saranda, Berat, and Korça. Investment-based support programmes may play a decisive role in expanding photovoltaics, especially in developing countries such as those in the Western Balkans. High upfront costs for projects may be reduced, thereby lowering major financial barriers to PV development.
How could such investment support look in practice?
Instruments such as capital or investment grants covering 20–50 percent of installation costs would significantly improve project profitability, particularly for private households and small businesses seeking to install rooftop or ground-mounted PV systems. Tax credits or deductions may also incentivise investment and create a favourable business environment for solar developers.
What about low-interest loans for PV?
Low-interest or government-guaranteed loans that facilitate access to capital for smaller developers and municipalities would help accelerate investment. Such financing mechanisms are considered valuable in relatively new PV markets like Albania, as well as in other Balkan countries such as Kosovo, North Macedonia, Montenegro, and Bosnia and Herzegovina. Investment risks remain high in these markets, and institutional experience in PV financing is still developing.
What about feed-in tariffs?
Given Albania’s evolving energy market structure and its efforts to diversify beyond hydropower, production-based support programmes may strongly incentivise solar power expansion. These measures could also help meet the National Energy Plan (NECP) target for renewable electricity generation.
Are feed-in tariffs already in use?
Feed-in tariffs are currently used to a limited extent for small-scale installations. However, they may be optimised to provide stable and predictable returns for investors, particularly in the initial years of operation.
What about contracts for difference (CfDs)?
CfDs are regarded as particularly attractive for large solar parks in high-irradiance areas, as they can protect developers from volatile electricity market prices. These mechanisms may provide long-term planning security and financial stability, foster domestic and foreign investment in renewables, and support broader integration of variable solar energy into the Albanian grid.
What is the status of auctions for PV projects in Albania?
Albania is advancing its electricity market liberalisation and aims to align with the EU’s energy framework. Market-based support programmes, such as auctions, may ensure cost-effective renewable energy expansion. The government has completed the first three wind power auctions and is evaluating their feasibility for PV projects, though no concrete progress has been made yet. Tendering procedures allow developers to compete transparently, reduce costs, and increase efficiency.
Have such auctions already been conducted?
Albania has conducted pilot projects using these mechanisms and allocated solar PV capacity through competitive auctions, which attracted significant private investment at low rates—according to reports from the Karavasta PV power plant. Extending these tenders to other sun-rich regions could further stimulate market development.
Are there incentive programmes for decarbonisation?
A quota system for renewable energy or a system of green electricity certificates is considered possible. This would require electricity suppliers to source a set percentage of their portfolio from renewables. Such an approach may complement auction mechanisms and facilitate a smooth transition to a more integrated, market-oriented support framework for PV and other renewables.
Could hybrid support programmes advance Albania’s energy transition?
Hybrid approaches that combine different support models appear particularly promising. For example, auction-based feed-in tariffs could offer stable revenues at competitive prices, boosting investor confidence and fiscal efficiency. Likewise, subsidies and tax incentives could be targeted at solar zones such as Myzeqe and Dumre, where high solar potential coincides with good grid connectivity. Close coordination of these instruments with permitting reforms and the NECP would help optimise investment incentives, spatial planning, and decarbonisation targets.
What is the political stance on this?
While financial incentives may encourage investment, their success depends on complementary policy reforms, including simplified permitting, transparent grid connection rules, and robust regulatory oversight. Coordination between the Energy Regulatory Authority (ERE), Ministry of Infrastructure and Energy, local authorities, and the scientific community is viewed as essential for building investor confidence.
What is the state of research and skilled personnel in photovoltaics in the country?
Research in the PV sector needs to be expanded, as does Albania’s technical expertise and institutional readiness to support large-scale solar and wind projects. Support programmes should form part of a broader energy transition strategy aimed at raising renewable energy shares, reducing dependence on fluctuating hydropower, and contributing to the country’s long-term decarbonisation and EU accession goals.
Is the will there, but conditions not yet right?
In summary, Albania has some of the most favourable solar resources in the Western Balkans. With an optimal support framework and diversified approach, PV expansion could progress rapidly. In the short term, investment-based programmes such as capital grants, tax breaks, and low-interest loans are likely to be most effective in promoting decentralised and small-scale PV in households, businesses, and municipalities.
What is the long-term strategy for PV expansion?
As the market matures, production-based mechanisms such as feed-in tariffs may provide stable returns for medium-sized developers. Auctions could become the main driver for large solar parks, ensuring transparency and cost efficiency. In the longer term, hybrid and targeted support models, together with spatial planning and grid expansion strategies, may encourage investment. Hybrid solar–hydropower systems with BESS (Balanced Energy Supply System) appear particularly relevant in Albania.
Interview by Manfred Gorgus.