Category: 3. Business

From herb boxes and flower pots to washing lines and hanging baskets, residents of Madrid, Berlin and other European cities are well versed at making the most of their compact balconies – even generating power for wifi, the kettle and the TV.

“Balcony solar” allows urbanites to install a small number of panels in the tight space outside apartments, which then generates electricity that can be used for the household. Soon flat owners and renters in the UK could be able to use the same “plug-in” technology, which is currently prohibited here.

The DIY systems which have grown in popularity in countries such as France, Italy, the Netherlands and Germany are typically plugged straight into the home’s power sockets, saving money on electricity bills and allowing people access to a new source of power.

So why can’t balconies in the UK simply have the same systems installed? Regulations around solar systems and wiring here mean that professionals must be involved in their installation and the panels cannot simply be plugged into the mains like a toaster.

In some European countries, where electrical systems are different to the UK, residents are allowed to put in place their own small systems – such as a few panels being hung off a balcony.

Thomas Newby of the Leeds-based engineering company Morgan & Newby says this difference in regulation means the technology has grown in popularity. In Germany, Balkonkraftwerk (balcony power plant) systems are now installed at 1.5m apartments.

“Various countries permit systems limited in output to 800W to be connected via a standard appliance plug to a socket-outlet,” he says. “As a result of this lower cost entry point, well suited to apartments where the solar modules can be hung or positioned on the balcony, uptake has increased significantly of late.”

This week the government said it would launch a safety study “with the aim of unlocking opportunities for plug-in solar over the next few years” as part of a new plan to triple the UK’s solar capacity by 2030.

In theory, this could mean people in flats would have a much cheaper way to access solar energy as the cost of labour is taken off the bill. And renters could take the systems with them when they move from flat to flat. This would give people who usually do not have access to cheap power a way to reduce their energy bills.

Newby said a typical kit containing two solar panels, a battery to store energy and the plugs needed to convert it to the household electrics would cost about £2,000. Batteries are used to store energy which is generated and not used immediately in the home, especially on sunny days such as those experienced last month, when temperatures reached 33C.

The study by the Department for Energy Security and Net Zero will look at whether the plug-in systems would be safe to use in the UK, where the electricity supply system is significantly different to countries such as Germany.

skip past newsletter promotion

after newsletter promotion

Solar Energy UK, the trade body for the industry, said the installation of plug-in solar panels is not allowed under building regulations or planning policy.

“This is due to a range of considerations including aesthetics, structural/building safety and consumer safety. There are other practical considerations including the location of electric sockets and cable protection – we do not tend to have electrical sockets installed on balconies in this country,” said Gemma Grimes, director of policy.

“The installation of all electrical equipment comes with risks, and it is important that any risks are fully understood prior to widespread rollout. We are aware of examples on the continent – including Germany – and are keen to learn from their experience.”

AI Act rules applicable to ‘general purpose’ AI (GPAI) models are due to take effect on 2 August 2025. A highly anticipated code of practice to support compliance with those rules, which was supposed to be published by the AI Office in early May this year, has yet to be finalised and published. Further AI Act rules applicable to ‘high-risk’ AI systems will take effect in August 2026.

Both sets of rules should be postponed, to allow for “innovation-friendly” changes to, and simplification of, the rules to be considered, a group of 50 European business leaders have said. They warned that the “Europe’s AI ambitions” are “at risk” as a result of “unclear, overlapping and increasingly complex EU regulations”. The group includes senior leaders from AI trade associations as well as companies such as Airbus, BNP Paribas, Mercedes Benz, and Phillips.

The group’s call, made in an open letter to senior EU officials, coincided with a report by Politico which suggested that the European Commission is considering delaying implementation of the GPAI code to the end of 2025.

According to Politico, the Commission will also decide by the end of August whether to delay implementation of the rules on ‘high-risk’ AI. That decision, according to Politico’s report citing an interview with EU commissioner Henna Virkkunen, will be influenced by whether new standards, being designed to support compliance with the ‘high-risk’ AI regime, have been finalised.

“We welcome recent discussions considering the need to postpone the enforcement of the AI Act as relevant guidelines and standards continue to be developed, and as various industries work together to find solutions that work for everyone,” the business leaders said.

“To address the uncertainty this situation is creating, we urge the Commission to propose a two-year ‘clock-stop’ on the AI Act before key obligations enter into force, in order to allow both for reasonable implementation by companies, and for further simplification of the new rules. This should apply both to obligations on e.g. high-risk AI systems, due to take effect as of August 2026, and to obligations for general-purpose AI models (GPAI), due to enter into force as of August 2025 while the corresponding and much anticipated code of practice has yet to be released,” they said.

“This postponement, coupled with a commitment to prioritise regulatory quality over speed, would send innovators and investors around the world a strong signal that Europe is serious about its simplification and competitiveness agenda. In the context of the broader review of EU digital rules you have announced, it would also create the room needed to develop an innovation-friendly implementation strategy and identify pragmatic avenues for regulatory simplification, covering both GPAI models and high-risk AI systems as well as broader digital regulations. We have developed detailed proposals and are ready to work hand in hand with the Commission,” the group added.

“It is a remarkable letter”, said Dr. Nils Rauer, expert in AI law and regulation at Pinsent Masons. “It is important to note that the authors do not call into question the overall need for a sound regulatory framework for AI – their concern is legal certainty. AI, if used in a false manner, can become poisonous.”

“All new laws initially come with some level of uncertainty,” added Anna-Lena Kempf, also of Pinsent Masons. “There are no court decisions or administrative orders yet which could provide steer on how the legal provisions are to be understood and applied.”

EU proposals for “simplification” of the EU’s digital policy rulebook are expected to be published in the autumn. That Commission package is anticipated in response to increasing industry and political pressure to reduce regulatory burdens in digital markets. The US government, for example, has called on the EU to do more to support technological innovation by companies, with many US-headquartered technology companies operating in the EU market, while Mario Draghi, the former European Central Bank president, in a report into EU competitiveness, last year urged action to reduce regulation – particularly for tech companies.

Earlier this summer, EU law makers at the Council of Ministers were presented with wide-ranging proposals for digital regulatory reform. Those proposals, drafted by the Polish government, including potentially using ‘stop the clock’ legislative instruments to delay the effect of legislative provisions that have already been finalised – including the enforcement provisions in the AI Act – in the same way that has happened already in the context of EU sustainability-related due diligence and disclosure obligations.

Last month, the Commission open a consultation regarding implementation of the AI Act’s rules on ‘high-risk’ AI systems. According to the consultation, some changes to those rules are under Commission consideration – including in relation to the classification of high-risk AI systems and the obligations associated with providing, deploying, importing or distributing those systems. The consultation closes on 18 July 2025.

Rauer said: “It is no secret that the EU AI Act is a highly complex piece of legislation. The European legislator is trying to build a regulatory framework both for AI systems and AI models with distinguished obligations for providers, deployers, importers etc. In this context, it is a challenge for businesses to define their own role and to make sure their own products are compliant by design and by default.”

Out-Law revealed in April that the mainstream emergence of DeepSeek – the Chinese open source AI tool developed at a fraction of the cost of other LLMs on the market, and without access to the same computing power – has spurred discussions within the Commission around classification of GPAI models in the context of the scope of rules applicable to GPAI models under the AI Act.

Baker McKenzie has advised the cryptocurrency exchange, Swyftx, on its acquisition of the boutique digital assets brokerage, Caleb & Brown, the largest recorded digital assets M&A transaction in Australia and New Zealand. The deal provides Swyftx with enhanced access to the US market, complementing Swyftx’s global expansion strategy. Swyftx was founded in 2018 and today has more than 1.2 million customers.

Led by Baker McKenzie Corporate M&A specialists Robert Wright (partner, Hong Kong) and Vi Ky Lam (counsel, Sydney), the team was supported by Lance Sacks (partner, Sydney), Peter Keeran (associate, Melbourne) and Michelle Heisner (partner, New York) alongside Financial Services Regulatory specialists Karl Egbert (partner, New Work), Terence Gilroy (partner, New York), Bill Fuggle (partner, Sydney) and Trudi Procter (partner, Brisbane).

Rob Wright commented: “We are excited to have had the opportunity to support Swyftx on this important transaction, reflecting increasing institutional interest and a move towards further consolidation across the digital assets sector. This transaction leverages Baker McKenzie’s cross-border M&A transactional capabilities across Asia Pacific and North America, alongside our regulatory expertise across the emerging digital assets sector.”

Vi Ky Lam added: “Coordinating across multiple workstreams was crucial, and our cross-border team worked seamlessly, utilizing their expertise to navigate these challenges. This deal underscores our Firm’s ability to handle complex transactions with precision and dedication.”

A transactional powerhouse with more than 2,500 deal lawyers in more than 40 jurisdictions, Baker McKenzie offers pragmatic counsel in the areas most critical for business. The Firm offers an unparalleled end-to-end service for technology M&A, covering the entire lifecycle of deals. The global fintech team provides the full range of legal services that clients need to develop, offer, and utilize products and services, such as those involving embedded finance, payment solutions, digital assets, lending, and digital banking. The team’s extensive experience acting for clients spanning the fintech sector, including many of the world’s largest financial institutions and most innovative technology companies, enables them to successfully assist fintech clients with a full range of regulatory and commercial complexities in both established and emerging markets.