New housing rooftop solar panel incentives unveiled

As part of the project to install solar panels on 100,000 roofs in Israel, the Ministry of Energy Infrastructure will launch two new incentive trucks to be discussed by electricity authorities. The two tracks are as follows: A faster return on initial investment by receiving higher tariffs on electricity produced in the first five years. And trucks linked to the consumer price index protect against inflation, which initially have low tariffs but are rising with inflation.

The Ministry of Energy Infrastructure estimates that if 100,000 homes had solar panels, these trucks would bring about a net cost of Israel Electric Co., Ltd. of NIS 51 million per year, but in the long run, these additional costs will balance out, so the overall compensation remains the same.

Today, anyone who installs solar panels on their home roof qualifies for an especially high NIS tariff of 0.48 per kWh and an additional NIS 0.06 in a metropolitan city that has been locked up for 25 years. This rate is several times the rate received by new power plants and solar energy fields. This comes from the benefits the Ministry of Energy sees when installing solar panels on roofs, such as energy efficiency (sometimes there is no need to transfer electricity to high voltage), decentralizing energy production, and achieving Israel’s renewable energy targets.

Nevertheless, not many people choose this option. This is primarily suitable for private property in suburban communities that are not necessarily wealthy. Therefore, to encourage the installation of solar panels on roofs, the Department of Energy has launched two new investment return tracks in response to public concerns regarding their installation. Recently, electricity authorities have made public for hearings the exact numbers people can receive on new trucks.

Two trucks

One concern is the time it takes to recover your investment, which can take over six years. Therefore, the “Rapid Payback Truck” offers an even higher tariff for NIS at 0.60 cents per kWh, rather than NIS 0.48 in the first five years. However, five years later, tariffs will be reduced to only NIS 0.60. In this way, repayments for installing solar panels are brought forward to provide a quick return on investment within five years, reducing the risk of installing solar panels on the roof.

The second concern is inflation, which has been rising in recent years and could rise in the next few years. The duties paid are fixed for 25 years, but if inflation is high, the actual value of the fixed amount will erode over time. Therefore, CPI combined tracks are set up and low tariffs (NIS 0.39 only) increase with inflation. If inflation is low, tariffs remain low, but if they increase, tariffs rise accordingly.

The goal is because the total tariff payments remain the same, so the electricity authorities had to estimate now what the expected inflation would be over the next 25 years. With no such formal estimates, experts used the Bank of Israel’s inflation forecast for the first decade, and then for several years afterwards – the Bank of Israel’s 5-10-year forecast. Of course, if inflation is actually higher than expected – those who choose this pass will make a profit compared to the regular pass, but if it is low they will lose.

As part of the hearing, electricity authorities are also estimateing the cost of the proposed truck in the short term. If solar panels are installed on 100,000 roofs, 50% of which are on high-speed recovery trucks, 20% index links, and 30% on regular trucks, the high-speed recovery trucks will cause an excess cost of NIS 1,29 million. The short term amounts to approximately NIS 51 million per year. But, of course, in the long run, this is intended to balance. There will be a decrease in payments for fast collection trucks and an increase in payments for inflation chain trucks. So, overall, the electricity authorities calculate that the total cost of the economy should be the same as continuing the regular truck.

Published by Globes, Israel Business News -en.globes.co.il- March 23, 2025.

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