Authorities Warn of Consequences of Cutting Solar Roof Electricity Tariffs
The Public Utility Authority (PUA) is considering a significant tariff cut for solar roof owners, threatening the economic viability of thousands of projects. Local authorities and energy experts warn this could halt Israel's progress toward clean energy goals.
Israel remains far from its renewable energy targets, while electricity demand is expected to surge and gas reserves are dwindling. Against this backdrop, the Public Utility Authority (PUA) is considering a double-digit percentage reduction in the tariff paid to solar roof owners—a move that could undermine the economic viability of thousands of projects and halt the current installation boom.
Local authorities and the Ministry of Energy are already warning that disrupting existing regulations will lead to business uncertainty and damage the profitability of projects across private, public, and business sectors. By the end of 2025, Israel produced only 16.7% of its electricity from renewable sources, falling short of the 20% government target and trailing the global average of approximately 34%.
"Preparing for a market contraction"
Currently, the tariff for small residential solar roofs ranges from 48-54 agorot per kWh, decreasing to 28 agorot for larger systems. The PUA is now considering a reduction to 35 agorot and a last-minute change to the pricing model. Eitan Parnass, CEO of the Green Energy Association of Israel, stated: "The uncertainty creates an atmosphere of ending. Companies are preparing for a market contraction, as has happened several times in the past. This is not an atmosphere of growth, but the opposite."
SolarEdge CEO Shuki Nir appealed to the Minister of Energy, noting: "Distributed generation on roofs is the cheapest and fastest energy insurance Israel can purchase. In the absence of certainty, the market will freeze: installation rates will plummet, targets will move further away, and thousands of jobs will be harmed."
Environmental benefits abandoned
Local authorities are among the primary victims, as many systems (15-100 kW) are located on public buildings. Jerusalem Mayor Moshe Lion has urged Energy Minister Eli Cohen to intervene, warning that ending the current regulation or removing geographical premiums will jeopardize urban projects already in the planning stages.
The Union of Local Authorities and the Forum of 15 have also expressed outrage, stating that changing the rules of the game will make investments unfeasible and erode trust in government policy. While the PUA and the Ministry of Finance aim to minimize costs by favoring solar installations on open spaces, they appear to be overlooking the environmental and health benefits of rooftop solar, as well as the critical need for distributed generation in the face of rising electricity demand.
