Proposed resource rent tax on small-scale hydropower plants

24 Oct 2025 13:45 CEST

The Norwegian Government has proposed lowering the threshold for the resource
rent tax on hydropower from 10,000 kVA to 1,500 kVA as part of the 2026 national
budget. If enacted in its current form, the change would bring most small-scale
hydropower plants in Norway under the tax regime, effective from 1 January 2027.


Small-scale hydropower currently plays a significant role in expanding renewable
energy production in Norway. Småkraft AS, along with other industry
stakeholders, strongly disagrees with the proposed tax, and is concerned that it
may lead to reduced power generation and lower investment in new renewable
energy capacity. Preliminary assessments by Småkraft AS indicate that
approximately 85 percent of its plants would become subject to the resource rent
tax.

The final outcome of the proposal will depend on a comprehensive political
process and approval by the Norwegian Parliament. As the current government is a
minority Labour administration, the enactment of the new tax will require
support from multiple other political parties.

Småkraft AS supports the Small-Scale Hydropower Association (Småkraftforeningen)
in actively engaging with political stakeholders and various decision-makers to
address concerns and highlight the potential consequences of the proposed tax.

Småkraft AS is evaluating the financial implications of possible outcomes and
will keep stakeholders informed as appropriate.

For more information, please contact:
Terje Vedeler, CEO, +47 907 26 568

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