Energy aid
Climate- and environment-friendly investment and investigation projects
The key aim of energy aid is to promote the development of innovative solutions for replacing the energy system with a low-carbon alternative in the long term. Energy aid can be granted for investment and investigation projects that promote:
1) the production or use of renewable energy, which in turn
- promotes new technology and its commercial utilisation,
- involves investments in a new plant, or
- is a replacement investment that significantly increases the production volumes of renewable energy or that allows the achievement of some other positive energy impact that complies with the goal
2) energy savings or improving the efficiency of energy production or use and
- the purpose of which is not to fulfil an obligatory environmental obligation
- is not a compulsory energy audit that companies must carry out under the Energy Efficiency Act (1429/2014)
3) otherwise replacing the energy system with a low carbon one.
Energy aid is discretionary, and priority is given to projects involving new technology. The aid can also be considered for projects using conventional technology, with priority for well-prepared projects and carefully compiled aid applications.
Aid is not granted for projects launched before the aid decision is made. In addition, aid will be granted to cover costs arising as of the date of the financing decision at the earliest. The aid must have a significant impact on the launch of the project.
"Investment project" means an investment in fixed assets.
"Investigation project" means energy audits and analyses, other investigations directly related to investments, and surveys for developing a new method. However, energy aid is not used for financing conventional business establishment, expansion, profitability, development, planning, marketing or background surveys, or other similar surveys, related to individual companies.
"New technology" means novel solutions that have not been experimented with on a broad scale in Finland. Typically, this means a first demonstration plant or plants. The adoption of new technology usually entails extra costs or risks compared to a corresponding project implemented using conventional technology. Solutions involving new technology play an important role in achieving long-term energy and climate goals.
Who is it for?
Energy aid is available for:
- companies of all sizes, including self-employed persons, traders and sole traders
- communities and organisations, such as municipalities, parishes and foundations
Energy aid is not available to:
- housing companies
- residential properties
- farms or projects implemented in connection with farms, except for projects in farms where the energy produced is used outside of agricultural production
- fisheries and aquaculture enterprises; incl. processing companies
- establishment projects receiving state subsidy
- organisations whose operation is financed from state budget
- agencies, institutions and other bodies belonging to a financial management organisation referred to in the State Budget Act (423/1988)
The following are also evaluated:
- whether the applicant is an ailing company (insolvent or having lost half of its share capital), as denoted in EU provisions
- whether the company has tax debt, outstanding payments of loans from Tekes/Business Finland, payment defaults, or other unsettled financial obligations
- whether there is a sufficiently detailed project plan
- whether the company has other (own or external) financing needed for an investment or investigation
What?
Investments in renewable energy in 2020 (conventional technology)
Investigation projects:
- renewable energy audits in the municipal sector, 50%
Investment projects:
- Heating plant projects (wood fuels), 10–15%
- Heat pump projects*, 15%
- Solar heat projects, 20%
- Small hydroelectric power projects, 15–20%
- Landfill gas projects, 15–20%
- Small wind power projects, 15–20%
- Small CHP projects, 15-20%
- Solar electricity projects, until 30.4.2019 25%
- Solar electricity projects, from 1.5.2019 20%
- Biogas projects, 20–30%
* Excluding projects related to the use of waste and residual heat, which are subject to aid percentages related to energy savings
Limitations, or aid is not granted:
- For large companies, the maximum support level is 30% (including new technology projects)
- Aid is not granted for energy efficiency projects carried out in new constructions (excluding new technology).
- Energy aid can be granted for projects implemented on farms only if 80% of the energy produced is used outside of the farm.
- Aid will not be granted for waste incineration plant projects.
- The investment costs of the projects entitled to the aid must be at least EUR 10,000.
- Energy aid can be granted for an investment project related to operations belonging to the scope of the Emissions Trading Act (311/2011) for the part of the project that contains new technology.
- Heat generation projects of more than 1 MW are not supported except in the case of new technology.
- Aid is not granted for heat production projects if the project involves replacing district heating with separate heat production.
- For heating plants, renewable energy must comprise at least 70% of fuel used.
- Projects related to energy reserves are only supported if they involve investments in production capacity for renewable energy, or machines and equipment improving energy efficiency. Maximum costs related to energy reserves in the project are 50% of the total project costs.
- Electricity generation projects above 5 MW are not supported (except for new technology). For 1-5 MW projects, the applicant must submit a long-term electricity sale contract or otherwise assign a long-term electricity buyer.
- In hydroelectric projects, the applicant must provide an explanation of the environmental impact and the need for fish trails.
- No aid is granted for the purchase of equipment for the production of wood and recycled fuels (including choppers, crushers, chip containers, other equipment), excluding projects involving new technology.
- For fuel distribution projects, aid can only be granted in connection with production plant projects. Aid can be granted for one distribution station at most, provided that it is located in the immediate vicinity of the production plant.
- In biofuel projects, support can only be granted for plant projects that do not use logs or pulpwood.
- In biogas projects, the applicant must submit a plan for further processing and use of digestate.
Investments promoting energy savings and energy efficiency in 2020 (conventional technology)
Investigation projects:
- energy audits in the municipal sector, micro-enterprises and SMEs related to energy efficiency agreements, 50%
- other energy audits, analyses and investigation projects, 40%
Investment projects:
- 20% for companies and communities that have entered into energy efficiency agreements
- 25% when the ESCO service is used in the above
- 15% for companies and communities other than those that have entered into energy efficiency agreements when the ESCO service is used
- http://www.energiatehokkuussopimukset2017-2025.fi/energiatehokkuussopimukset/
Increased support (20–40%) will be granted for projects containing new technology, including companies and municipalities that have not entered into energy efficiency agreements
Limitations, or aid is not granted:
- The maximum amount of aid for large-scale companies is 30% (including new technology projects).
- The precondition for the ESCO services is that guaranteed savings of at least 50% are available and that verifiable savings comprise at least 80% of total savings during the verification period, calculated in euros.
- Aid is not granted for exhaust gas scrubbers or related heat recovery investments if they are related to emissions trading plants or heating plants with power ratings exceeding 10 MW.
- Energy aid can be granted for an investment project related to operations belonging to the scope of the Emissions Trading Act (311/2011) for the part of the project that contains new technology or if the benefit available from emissions trading due to the investment is minor.
- Aid is not granted for lighting-related projects involving conventional technology.
- Aid is not granted for the insulation of buildings, doors or covers of refrigerator equipment and devices, or other corresponding solutions.
- Aid is not granted for energy efficiency projects carried out in new constructions (excluding new technology).
- The investment costs of the projects to be supported must be at least EUR 10,000.
Projects involving new technology:
- investments in renewable energy sources and energy efficiency, new technology, maximum 40%
How to apply for energy aid from Business Finland
All energy aid applications regardless of project size must be submitted to the innovation funding centre Business Finland. Applications can be submitted continuously until further notice. The Business Finland innovation funding centre grants aid for projects whose acceptable costs do not exceed EUR 5 million and for projects involving new technology whose acceptable costs do not exceed EUR 1 million. Aid for higher investment costs is granted by the Ministry of Economic Affairs and Development.
Aid is not granted for projects launched before the aid decision is made. In addition, aid can be granted to cover costs arising as of the date of the financing decision at the earliest. There is nothing to prevent energy aid being granted for costs arising as of the date of the financing decision if the customer has a pending broader investment project that will be implemented outside of the energy aid project and has already been launched, the application for energy aid concerns a limited new technology or energy efficiency measure included in the investment project, and this part of the project has not yet been launched. There is nothing to prevent energy aid being granted to cover costs arising as of the date of the financing decision if clearance and earthwork connected with the investment project have already started before the decision to grant the aid was made.
Acceptable costs include costs arising from investment and investigation projects that were caused by the project during its implementation (starting, at the earliest, from the date of the financing decision). Costs based on an order placed before the financing decision are not considered eligible except in cases where the order includes the opportunity for written cancellation connected with the launching of the project.
Acceptable project costs are:
- salaries and wages arising from the project, based on the monitoring of working hours
- indirect employee costs
- travel expenses (only in investigation projects)
- costs of materials and accessories
- equipment purchases
- purchased services
- possible costs of an auditor's report
If the company or community has a plan for an investment in increasing the use renewable energy or saving energy, or if it intends to commission an energy audit in order to identify opportunities for saving energy, it should discuss the matter with the experts of the energy aid team at Business Finland. The team's contact details are provided below.
The application is submitted through the online service on Business Finland's website. Through the service, it is possible to monitor the processing of the application and supplement it, where necessary. It typically takes about two months to process the application.
The applicant must appoint a director for its energy investment project from its organisation. A contact person must also be appointed for the project, who can be from the applicant's organisation or from some other organisation of the applicant's choice.
Appendices to the application (in Finnish or Swedish only):
Appendices (appendix to the investment or investigation project application, energy aid evaluation form and project plan) to the application have to be submitted either in Finnish or Swedish.
- Appendix to the investment project application (docx)
- Appendix to the investigation project application (docx)
- Energy aid evaluation form (docx)
- Also read the energy aid project plan instructions (docx)
The project plan contains a brief description of the activities of the applicant organization, its ownership, the main key figures (turnover, number of employees) and a description of the property or production process related to the investment/platform.
The description, technical specification and cost breakdown of the investment are also part of the project plan and its attachments (e.g. offers). The objectives of the investment, including the numerical value and profitability calculation (payback period), must be included in the project plan, as should the applicant's knowledge of the status of the relevant official permits related to the investment.
The applicant should carefully read the General terms for energy aid (pdf), which describe in detail the content of eligible costs, for instance.
Investment aid for phase-out of coal in energy industries
The Ministry of Employment and the Economy has opened a call for investment subsidies for projects accelerating the replacement of coal in energy production by the end of 2025.
In 2020, EUR 30 million has been allocated for this purpose in the energy aid mandate, and a total of EUR 90 million will be made available as investment aid in the period 2020–2022.
The aid can be granted to projects that promote
- the production or use of renewable energy,
- energy saving, or
- more efficient generation and use of energy.
Priority will be given to projects that are based on other technologies than combustion. After these projects the priority is given to combined heat and power production, and lastly to separate heat production. Novelty and the demonstration potential of the projects will be taken into account.
The aid applications are submitted using Business Finland's electronic system but they will be evaluated at the Ministry of Economic Affairs and Employment. Applications can be submitted throughout the year 2020. The application and any annexes are to be submitted in Finnish or Swedish.
Application form (in Finnish, docx)
Investment aid for large demonstration projects 2021
The Ministry of Employment and the Economy has opened a call for investment subsidies for large demonstration projects for new energy technology for 2021. In 2021, EUR 60 million has been allocated for this purpose in the energy aid mandate. The call is open until the end of February and intended for projects with an investment cost of more than EUR 5 million.
The investment aid is intended for future energy solutions to meet national and EU targets for 2030. The categories of projects supported under them are:
- Renewable biofuels for transport
- Other than combustion-based heat production
- Other large scale demonstration projects involving new technology.
The objective of the scheme is to promote nationally and internationally replicable solutions based on new energy technologies.
The call closes on February, 2021. The aid applications are submitted using Business Finland's electronic system but they will be evaluated at the Ministry of Economic Affairs and Employment. The application and any annexes are to be submitted in Finnish or Swedish.
Applying form for large demonstration projects (docx, in Finnish)
After the financing decision
After the applicant receives the financing decision, it must be approve through Business Finland's transaction service, as otherwise the decision will not enter into force and the aid cannot be paid! The financing decision can only be approved by a person authorised to sign for the company.
Accounts must be kept of the project costs for the duration of the project. The approved duration of this support decision is binding and cannot be exceeded without a change in the project schedule, for which a separate application must be made!
In particular, special attention is paid to the salaries or wages of the beneficiary, based on monitoring working time by the hour. The auditor must issue an audit report for its observations related to project costs and their monitoring.
The final report and cost statement must be submitted through Business Finland's Online Service by the date specified in the decision. The above-mentioned date is binding on the recipient and must not be exceeded without the permission of Business Finland. Non-compliance with the submission date of the final report and cost statement will prevent the payment of aid.
The Online Service includes a separate section for the report and cost statement, and both must be completed. Business Finland will only pay for project funding, when both the report and the cost statement have been approved by Business Finland.
After the investment or investigation is complete, the applicant will report and render an account of the project costs electronically through Business Finland's transaction service.
Key issues related to reporting and the cost statement:
- when the salaries are being settled, a Y4 (salary specification template) should always be provided, and an auditor's audit report should be provided together with the cost statement
- in the case of purchases from an associated company, Y3 (cost statement), Y4 (salary specification), Y5 (the accountable leader's statement) and, by the time of the final report at the latest, the auditor's report on the associated company's costs, must all be submitted
- Within the projects, the auditor's report on the beneficiary can be replaced by a maximum of five purchase receipts (material and supply costs, equipment purchases, purchased services) as follows: extract from the general ledger account of the project, copy of purchase invoices and a payment receipt or account extract (with regard to applications submitted in 2017, the regulation in force at the time requires that copies of invoices and payment receipts be authenticated copies).
- The energy aid evaluation form must be submitted in the context of final reporting, within two years of the payment of the final instalment.
In investigation projects, the beneficiary must provide Motiva Oy with target-specific inspection reports and summary tables for rendering a final account of the project (maintable.xls or municipaltable.xls). More detailed instructions are available at this link: Transfer of energy inspection reports and main tables to Motiva. For information on the progress of inspection projects, click here for Motiva's website.
Ongoing projects (having received energy aid in 2016 or earlier)
The following procedure should be employed for energy aid projects launched in 2016 or earlier (submitted on printed forms) that have received aid from ELY centres.
Payment decisions for these are administered by KEHA-keskus. This means that the customer must submit payment applications for the above energy projects, issued on printed forms, to KEHA-keskus as follows, according to the region where the project is implemented: https://www.keha-keskus.fi/yhteystiedot/maksatusalueiden-yhteystiedot/
Frequently asked questions and answers
Q: If industrial or commercial premises are in residential use only to the extent of the so-called caretaker's dwelling, is it possible to apply for aid for an energy investment related to the purpose of the property?
A: The share in residential use may not exceed 10% of the total surface area or cubic volume of the property. If the percentage is less than or below 10%, an aid application can be made for an investment whose costs are reduced by the percentage related to residential use. The residential use percentage may also be assessed on the basis of electricity consumption, if this can be shown using separate readings.
Q: Are LED lighting investments made as energy saving projects eligible for aid, if investments are also being made in smart control functionality?
A: They are not. The price of LED lighting has fallen as the technology has developed, and has become more profitable. In any case, most lighting investments are now based on LED lighting, so smart control is no longer sufficient to qualify for energy aid.