A blow to solar roof owners: The Electricity Authority initiates a tariff cut

The existing tariff for solar roof owners — 48 to 54 agorot per kilowatt-hour throughout the day — is set to expire at the end of 2026. Ahead of the decision on the alternative model, it has come to the attention of Globes that the proposal on the table is expected to change the electricity market and curb future price increases in the tariff for all consumers.

Thus, according to the Ministry of Energy's proposal, roofs will be divided by size: residential roofs will continue with the existing model of a fixed tariff, but at a lower price, while large roofs such as those on shopping malls will move to a system of competition in the electricity market alongside incentives for installing storage batteries. Either way, the current tariff appears to be too high and is expected to drop as early as next year to up to 35 agorot per kWh only.

Revolution on solar roofs

This week, a discussion was held at the Public Utility Authority (Electricity Authority) plenum regarding payment to owners of solar roofs up to 630 kilowatts, including everything from private homes to shopping malls and giant roofs. The current model, which grants a flat tariff for all hours of the day, is considered outdated and problematic. The model proposed by the Ministry of Energy, as learned by Globes, divides roofs producing at low voltage into three parts. The first part, up to 30 kilowatts — including all residential roofs — continues the existing situation at a lower tariff. The level of the new tariff remains an open question, as it is calculated to cover the cost of equipment and installation and leave the roof owner with a reasonable profit in a reasonable period, under the influence of macroeconomic factors such as the dollar exchange rate, interest rates, and inflation.

However, according to information that reached Globes, the tariff reduction may reach up to 35 agorot per kWh only, compared to 48 to 54 agorot today. This is a dramatic reduction. According to the Ministry of Energy's proposal, the tariff will decrease permanently by 1% every quarter. Thus, the market will receive certainty on one hand, and an incentive for as fast an installation as possible will be created on the other.

Proposed electricity tariff reform

• Private homes (up to 30 kilowatts): remain on a fixed tariff, but cheaper and continuing to decrease by 1% per quarter, plus an urban premium.

• Small shopping malls and industrial buildings (30–100 kilowatts): tariff that changes by hour: cheap during the day, expensive at night, to encourage energy storage.

• Commercial centers (100–630 kilowatts): moving to an SMP model — a price that moves in real-time according to supply and demand on the grid, plus a premium.

The second tier, intended for capacities between 30 and 100 kilowatts such as in schools or small shopping malls, will be split into a day tariff and a night tariff. The day tariff will be significantly lower to reflect the surplus of solar production at noon, while the night tariff will be higher with the goal of incentivizing the installation of storage batteries, flattening the production curve, and shifting it to the evening.

The third tier, between 100 and 630 kilowatts such as in commercial centers or factories, will move to a competitive market model similar to large solar fields at high voltage. These roofs will compete against other producers in the economy and receive a subsidy in the form of a premium on the competitive price, which will compensate for their disadvantage due to their small size compared to the huge solar fields.

Combining these three tiers may significantly reduce the burden of solar roofs on the electricity tariff for all consumers. In the existing model, meeting the target of 150,000 additional roofs will add almost 900 million shekels to the tariff — about 2.5% of it — while the new model will cost much less.

Beyond the savings, the move is intended to solve the lack of uncertainty in the market ahead of the expiration of the current model at the end of 2026, as the framework that will replace it has not yet been finalized. For solar entrepreneurs planning new projects, this is a problematic figure that makes economic preparation difficult, as they need early certainty regarding the tariff. The Electricity Authority will have to decide in the coming months, after receiving responses from the public and making adjustments.

Don't miss the train

Against this background, the Ministry of Energy has launched a "Don't miss the train" campaign, intended to encourage the installation of solar roofs already this year to lock in the current high tariff for 25 years. The meaning: whoever installs a system this year will secure a preferred price for a quarter of a century, while whoever waits until next year will settle for a lower tariff. Nevertheless, the model is still preliminary, and other alternatives have been raised at the Electricity Authority: moving to a market model through private electricity suppliers who will price it themselves, holding a tender for each roof on the price, and the deliberation of whether to encourage local storage at low voltage on the roofs themselves or to prefer storage at high voltage in other places on the grid.

Response from the Ministry of Energy and Infrastructure: "We aim to promote a maximum amount of renewable energy in order to meet the government target of 30% by 2030. Therefore, it is necessary to continue to promote in parallel and in a balanced manner dual-use solar facilities, ground-based facilities, agro-voltaics, and other technologies. The Ministry believes that the field of dual-use renewable energy should continue to be promoted with maximum certainty, feasibility, and simplicity. All this, while reducing costs for the economy, ensuring maximum benefits for the electricity system, optimal use of the grid, and avoiding rapid changes that could lead to a freeze in the market. Beyond this, we will not comment on internal discussions."