The Lithuanian Government has approved amendments to the Law on Renewable Energy Resources, aimed at ensuring a clearer and more transparent administration of the so-called production contribution levied on renewable electricity generators.

The reform seeks to strengthen public support for renewable energy and ensure that the financial benefits flow directly to households and communities living near power plants.

“A revised production contribution model will ensure that the development of renewable energy is beneficial both to communities and to citizens. We want funds to be distributed efficiently and transparently so that people feel a tangible benefit, rather than symbolic or absurdly small payments,” said Acting Minister of Energy Zygimantas Vaiciunas.

Key measures include abolishing the contribution for small-scale plants of up to 100 kW, as well as exempting payments where the total does not exceed €100. Large commercial operators, however, will be required to contribute more. The distance within which community benefits are allocated will also be reduced from 5 km to 1.5 km, with support now provided per household rather than per individual resident.

Funds collected below €1,000 will be directed to community organisations. In addition, electricity producers granted permits before 1 July 2023 will begin paying the contribution ten years after the permit was issued or from the date this law enters into force.

The Government expects the new system to generate nearly three times more funds for communities compared with last year: around €799,000 in 2025, up from €300,000 in 2024. The move is intended to eliminate token payments of just a few cents and to establish a fairer and more transparent support mechanism.

The overarching aim of the contribution scheme is to foster greater public acceptance of renewable energy expansion while ensuring the smooth roll-out of new projects.

The amendments must still be approved by the Seimas, Lithuania’s Parliament.