The year 2025 promises to be the next major phase in the development of renewable energy sources (RES), with the potential to redefine global energy markets and accelerate the climate transition. Experts from TPA Poland, Baker Tilly TPA and Baker Tilly Legal Poland share their forecasts with you, highlighting the key trends, challenges and innovations that could shape the future of RES.
Comment by Damian Kubiś, Partner, Tax Advisory, TPA Poland
Renewable energy sources (RES) in Poland are steadily gaining importance, and 2025 looks to be the next major step towards the energy transition. Below is a subjective summary of the issues that I believe will have the most significant impact on the RES industry in Poland this year.
Progressive transition
The energy transition in Poland is gaining momentum and the share of RES in the national energy mix is gradually increasing. By the end of 2024, the total installed capacity of renewable energy sources reached more than 31.5 GW, which corresponds to more than 45% of the total installed capacity in the Polish energy system. A further increase in this share is planned for 2025, which will be key to meeting climate targets and reducing CO₂ emissions
Amendments to the Law
One of the most significant legislative developments related to RES in 2025 will hopefully be the entry into force of the amended Distance Law. The planned reduction of the minimum distance of wind turbines from residential buildings from the current 700 m (or the 10H rule) to 500 m may dramatically change the investment situation. According to estimates by the Polish Wind Energy Association (PWEA), this change could enable the construction of an additional 10 GW of onshore wind capacity. This means an opportunity to launch numerous projects hitherto blocked by restrictive regulations.
From an economic perspective, new investments in wind energy can undoubtedly bring significant benefits to Poland. Environmental benefits aside, the construction and operation of wind turbines will generate new jobs locally and nationally, guarantee Poland additional GDP growth, and provide local governments with significant additional local tax revenues.
Further development of PV projects
The year 2025 also promises to be a time of further strong growth for photovoltaic projects. Support programmes such as My Current 6.0, Energy Plus, Renewable Energy Grant, Thermomodernisation Premium, Energy for the Countryside, Agroenergy or the agricultural tax credit for photovoltaics continue to attract strong interest from individual and institutional investors. Combined with the increasing price competitiveness of PV installations, it can be expected that the total installed PV capacity could approach 22 GW by the end of 2025.
Modernisation of networks
Upgrading the transmission infrastructure remains one of the biggest challenges. The increase in power from RES requires the expansion and upgrading of power grids to ensure stability of supply and the ability to receive energy efficiently. In 2025, investment in the development of high- and medium-voltage networks will be key, especially in areas with high RES potential. Transmission system operators will face the need to accelerate investment procedures and ensure adequate financing.
At the same time, NIP funds can accelerate key infrastructure projects, such as the development of transmission infrastructure or smart grids.
Comment by Joanna Prokurat, Partner, Tax Advisory, TPA Poland
In 2025, the energy sector in Poland will be dealing with a number of issues, among which it is worth noting at least two with a significant financial dimension – the record state aid for the energy sector and important changes to property tax for the industry.
Firstly, 2025 may be an exceptional year in terms of the level of support provided to energy companies, particularly in their energy transition, which is the European Union’s goal until 2050. As achieving these goals within this timeframe may be problematic due to investment costs, among other things, billions of euros of public money will be allocated to activate the sector.
In addition to electromobility and the most popular RES using wind, water, solar and earth energy, there will be a strong emphasis on investment in hydrogen production and the construction of energy storage facilities, essential for balancing the energy system.
State aid will be provided to entrepreneurs in the form of grants, loans, including preferential loans, and equity investments.
In Poland, the main sources of funding will be the Modernisation Fund, the National Reconstruction and Enhancement Plan (NERP), European Funds for Infrastructure, Climate, Environment, the Fair Transformation Fund, as well as regional programmes. It is to be expected that new support instruments will be created and an increasing pool of public funds will be allocated to energy transformation,
Secondly, new Property tax regulations have been in force since 1 January 2025, which directly affect the energy industry. In particular, the new regulations have introduced changes with regard to the objects of property tax – buildings and structures.
For the energy industry, it is important to clearly indicate that only the building parts of a wind power plant, nuclear power plant, photovoltaic power plant, biogas plant, energy storage facility, in the part that is not a building, can be a structure for the purposes of this tax. At the same time, they constitute one of several categories of structures within the meaning of the Property tax regulations.
At the same time, the definition of a structure within the meaning of the new Property tax regulations is broad, takes the form of an open catalogue, and the tax legislator has not avoided ambiguities. For example, certain terms have not been made more precise, e.g.: construction equipment, industrial installation or other technical device. The mutual relations between individual categories of structures were not clarified, e.g. whether wind power plants included as a separate category of structures consumes all their elements, or whether other elements of such power plants belonging to other categories of structures within the meaning of the Property Tax Act should be recognised as taxable, if, for example, the definition of technical equipment indicates that it refers to other elements than those listed earlier in the legislation.
Undoubtedly, the new property tax rules will occupy the energy sector, which will have to decide, among other things, on the need to recognise new subjects of taxation, to establish their tax base.
Comment by Grzegorz Gajda, Managing Partner, Baker Tilly Legal Poland
Energy transformation and the development of renewable energy sources (RES) are key elements that will shape the future of the energy sector in Poland.
Poland’s Energy Policy until 2040 (PEP2040) envisages a significant reduction in the share of coal in the energy mix in favour of RES and nuclear power, in response to growing climate commitments and the need to diversify energy sources.
One of the main directions of development is to increase the share of RES in the national energy mix. In particular, projects related to wind power, both onshore and offshore, and photovoltaics will be developed. Investment in these technologies is key to achieving climate targets and reducing CO2 emissions.
The pace of renewable energy development in Poland is expected to accelerate in 2025, which will have a significant impact on the energy transition and market shaping in the coming years. At the end of 2024, the Sejm passed a number of laws related to the broader energy sector, including hydrogen regulations, the development of offshore wind farms, simplification of procedures for RES investments and a freeze on energy prices, which we write about here.
In the onshore wind farm sector, we are still waiting for the enactment of the so-called Distance Law, which is expected to liberalise the current regulations and reduce the minimum distance from buildings from 700 to 500 metres. In addition, by virtue of the EU RED III directive, Poland has to designate so-called accelerated RES development areas, which will be important in the context of further transformation of the sector. On the other hand, the market for offshore wind farms in Poland is in its infancy, but efforts to launch the first projects are being intensively pursued.
Prospects for RES development in Poland are promising, but require further decisive action and investment, particularly in energy and transmission infrastructure. Lack of infrastructural investments will prevent dynamic RES development. Energy transformation and RES development are key elements that will allow Poland to meet its climate targets and ensure energy security. We are optimistic and want to further support investors in this process, especially from a legal perspective.
Comment by Mikołaj Ratajczak, Partner, Tax Advisory, TPA Poland
The first phase of offshore projects is gaining momentum. Of the planned 5.9 GW, the first project will be completed as early as 2026 and the others should be finalised shortly afterwards. The transition to the project implementation phase means challenges for investors and their subcontractors on the grounds of tax settlements. As these are pioneering projects for Poland, both in terms of scale and nature, the lack of developed practice in some areas may be an additional complication. Below, I identify the key tax issues that entities implementing such investments should prepare for in the coming year.
The first important issue is the accounting for external financing costs. Often the investor’s partner is a consortium of financing institutions (including foreign ones), which raises additional challenges related, for example, to the correct accounting of the investment from the perspective of withholding tax (WHT). In addition, debt financing costs are subject to statutory restrictions on their inclusion in tax costs, although offshore investments should find an exemption for so-called long-term public infrastructure projects.
Another important issue is the so-called cost segregation, i.e. the division (both accounting and tax) of incurred expenses into current costs and investment costs. In this context, it is also important to further break them down into individual fixed assets and to develop appropriate allocation keys.
As an aside, it is worth noting the changes to the Local Taxes and Fees Act that have taken effect since 2025. Although Property tax does not apply to offshore developments, these changes may affect those parts of projects that are located onshore, such as cables, substations or service ports.
The last issue I would like to sensitise those responsible for tax settlements – both on the part of investors and their subcontractors – is the correctness of current settlements. Due to the complexity of the process, which is partly carried out outside Poland, doubts may arise concerning, among others, taxation of the transaction with VAT (which is also important from the perspective of the right to deduct VAT on the part of the party receiving the invoice), classification as a supply of goods vs. a service, place of taxation, customs settlements or the risk of the so-called Permanent Establishment. Given the value of the projects being implemented, possible errors in these areas can have serious financial consequences.
Comment by Sebastian Pogorzelski, Manager, Corporate Finance, Baker Tilly TPA
In 2025, we expect capital expenditures related to PV installations to continue to decline or stabilise – their current record low levels favour investment in this technology. On the other hand, due to the dynamic growth of PV installations in Poland, we will increasingly face production constraints and low prices during peak production periods, mainly in summer. It will therefore be crucial for potential investors in photovoltaic installations to skilfully determine the profitability of their investments.
On the other hand, 2025 should prove to be a breakthrough year for the wind industry, with the expected enactment of the draft liberalisation of the Distance Law. It assumes that the distance of onshore wind farms from the nearest buildings will be reduced from the current 700 m to 500 m. Calculations by the Ministry of Climate and Environment show that the liberalisation of the regulations could more than double the potential for onshore wind energy – from 4 GW of new capacity to more than 10 GW by 2030. The passage of this amendment this year would mean a significant increase in investor interest in potential new wind projects in Poland and the search for suitable locations for wind farms under the new rules.
Comment by Krzysztof Horodko, Managing Partner, Audit & Business Advisory, Baker Tilly TPA
An important topic in 2025 will be the continued work to implement the EU directive promoting the use of renewable energy, especially with regard to RES acceleration areas. This year we should have mapped areas for onshore RES development.
Just as Sebastian Pogorzelski described in his predictions – this year will also be characterised by an increase in energy storage installations. Storage facilities showed power at the power market auction, indicating that they will be increasingly present in the landscape of Poland’s energy system. It is only worth mentioning that the contracted capacity for batteries for 2027 was 165 MW, for 2028 1734 MW, and the latest auction has already yielded 2.5 GW.
In 2025, cable pooling installations are also sure to become increasingly popular. In this model, the first projects have already been realised in 2024, for the time being in the lift + solar formula, but after the expected amendment to the law, this type of formula should accelerate and energy storage should start to appear in it.
Comment by Maciej Pyszczek, Associate, Corporate Finance, Baker Tilly TPA
2025 will be another year in which we will see dynamic RES growth. The expected liberalisation of regulations for onshore wind power should bring an increase in new capacity in this segment, but this effect may not be fully visible next year due to the long investment process. The key challenge for renewable energy remains operator curtailment and low peak prices (especially for PV). This should lead to an increase in the installation of energy storage facilities, which will be able to monetise the price differentials occurring in the market, as well as the provision of balancing services.
