New housing rooftop solar panel incentives unveiled

As part of her project to install solar panels at 100,000 falls in Israel, the Ministry of Energy and Infrastructure will start two new incentives for discussion by the Electricity Authority, for those wishing to put solar panels on their homes. The two paths are: a faster return for initial investment by receiving a higher tariff for electricity that was produced in the first five years, balanced with a lesser tariff after that; A path is related to the consumer price index to protect against inflation with a tariff at first but rises with inflation.

The Ministry of Energy and Infrastructure estimates that if there are solar panels at 100,000 homes, these tracks will lead to a net cost of 51 million NIS annually for Israel Electricity, but in the long run, these additional costs must balance, and therefore the total compensation will not change.

Anyone who installs solar panels on the roof of his home today has the right to have a particularly high tariff from 0.48 NIS per kilowatt hour, and an additional 0.06 NIS in big cities, closed for 25 years. This rate is several times higher than those received by new power plants and solar energy fields. This stems from the advantages that the Ministry of Energy sees in installing solar panels on surfaces, including energy efficiency (sometimes there is no need to transfer electricity to high voltage), decentralization for energy production, and meet the renewable energy goals of Israel.

However, many do not choose this option, which is mainly suitable for private homes in suburb communities that are not necessarily wealthy. Therefore, to encourage the installation of solar panels on the surfaces, the Ministry of Energy begins in two new investment revenues tracks in response to general concerns about installing them. In recent days, the Electricity Authority has published the general numbers that people will be able to receive in the new tracks.

Two paths

One of the concerns is the time it takes to recover the investment, which may take six years or even longer. Thus, the “Rapid Recovery Path” will provide a tariff higher than 0.60 cents per kilowatt hour instead of 0.48 NIS in the first five years. But after these five years, the customs tariff will be reduced to only 0.60 NIS. In this way, the payment will be provided to install solar panels to achieve a quick return on investment within 5 years, which reduces the risk of fixing solar panels on the surfaces.

The second concern is inflation, which has risen in recent years and can continue to rise in the coming years. The paid definitions are fixed for 25 years, but if inflation is high, the true value of the fixed amount will erode over time. Therefore, a consumer price index linked to a lower tariff (only NIS 0.39) has been set but increases with inflation. If the inflation is low – the tariff remains low, but if it increases – the tariff rises accordingly.

Since the goal is for the total customs tariff payments to remain as it is, the Electricity Authority has now that the expected inflation would be expected in the next 25 years. Due to the lack of such an official estimate, experts used inflation forecasts at the Bank of Israel for the first ten years, and for the years that followed – Bank of Israel for years 5-10. Of course, if the inflation is already higher than expectations – whoever chooses this path will benefit compared to the natural path, while if it is less, it will lose.

As part of the plenary session, the Electricity Authority also estimated the costs of the proposed paths in the short term: if there are solar panels installed on 100,000 falls, of which 50 % of them are on the rapid recovery path, 20 % linked to the index, and 30 % on the normal path, which leads to the total cost in everything. The short range will be about 51 million New annually. But of course, in the long run, this aims to balance: payments to track the rapid recovery path, and pay payments to increase the path related to inflation. In general, the Electricity Authority calculates that the total cost of the economy must be the same as the continuation of the normal path.

Posted by Globes, Israel Business News – En.globes.co.il – on March 23, 2025.

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