UPDATE 1-Bulgaria imposes 20 pct fee on solar and wind power

Thursday, 5 Dec 2013 | 3:33 AM ET

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SOFIA, Dec 5 (Reuters) - Bulgaria's parliament voted on Thursday to impose a 20 percent charge on income from wind and solar power installations next year as the Socialist-led government struggles to keep down electricity bills.

The government has pledged to keep power costs low to avoid public unrest in a country where energy bills take a big chunk of people's monthly income, especially during the winter.

Protests over high electricity bills - partly the result of investment in green energy - toppled the previous centre-right cabinet in February.

The new fee, taking back some of the generous subsidies the European Union's poorest country pays to the producers of green energy, was approved as part of Bulgaria's 2014 budget.

Producers of wind and solar power have attacked the new fee, which was proposed between the two budget law readings without prior debate, saying it will lead to bankruptcies and scare away foreign investors.

Dozens of investors from Germany, Austria, the United States and South Korea have rushed to the Balkan country to take advantage of its subsidies. Their investment of more than 4 billion euros ($5.4 billion) has built installations producing more than 1,600 megawatts in wind and solar power.

Bulgaria's parliament also voted to limit the amount of energy that can be purchased at preferential prices, which the green energy sector says will hit their income by 15 to 20 percent on the top of the new fee.

"These measures are only concerning wind and solar energy producers. We will appeal to the president to impose a veto on the 2014 budget to stop that discriminatory move," said Nikola Gazdov, of the Bulgarian Photovoltaic Association.

Prime Minister Plamen Oresharski said on Wednesday that the expected proceeds of about 150 million levs ($104 million) from the fee next year will be used to cut growing deficits in the ailing energy sector.

The state energy regulator has cut electricity costs for households by a total of 13 percent since February, worsening the plight of power producers and distributors. ($1 = 0.7377 euros)

(Reporting by Tsvetelia Tsolova; Editing by David Goodman)