Israel Electricity Authority Proposes Major Shift in Solar Energy Incentives
Translated & summarized from Bizportal by baba
Israel's Electricity Authority is proposing a significant overhaul of solar energy incentives, aiming to reduce subsidies and boost market competition by 2030. The plan involves a gradual decrease in tariffs for producers, prioritizing grid connections based on economic contribution and price, and expanding sales through private suppliers. These changes, set to be implemented starting in 2028, will primarily affect larger commercial projects, while small installations remain on a fast track. Public feedback is open until November 10, 2026.
The story in 6 lines · by baba
- Israel's Electricity Authority plans to reduce solar energy subsidies and increase competition by 2030.
- Tariffs for low-voltage solar producers will decrease gradually, with an annual 5% reduction after the first year.
- Grid connection priority will shift to a price-based competition starting January 2028.
- New channels for selling electricity through private suppliers will be expanded.
- The maximum capacity eligible for tariffs will decrease from 630 kW in 2027 to 300 kW in 2030.
- Public comments on the proposed changes are due by November 10, 2026.
The Israel Electricity Authority has unveiled a new plan to reform how renewable energy production is incentivized, aiming for reduced subsidies and increased competition in the solar sector by 2030. The proposed framework includes a gradual decrease in the tariff paid to low-voltage producers, expanded options for selling electricity through private suppliers, and a focus on competition for grid connection capacity, which has become a scarce and valuable resource.
Citing the declining costs of solar installations and equipment, the Authority noted that the current subsidy component for renewables constitutes about 10% of residential electricity bills. The new plan suggests an initial two-stage reduction in the first year to allow developers and banks to adapt, followed by an annual 5% decrease. The tariff for new installations will end uniformly in late 2047, meaning earlier connection yields a longer period of subsidy. Delaying a project by one year will effectively shorten the subsidy availability.
A more significant change begins in January 2028, when grid connection will become a price-based competition. The Authority proposes prioritizing connection requests based on their economic contribution, favoring facilities that sell electricity on the market without a premium, followed by those offering the lowest price for their electricity. This aims to utilize limited grid capacity more efficiently by connecting projects that generate power at a lower cost first.
Small installations up to 15 kilowatts will remain on a fast track, with the changes primarily targeting larger commercial projects. The Authority also intends to open new channels through private suppliers, allowing facilities to contract directly and operate under a market model, with premiums for suppliers based on associated energy production. The maximum capacity eligible for tariffs or premiums will decrease from 630 kilowatts in 2027 to 300 kilowatts in 2030, with larger facilities operating within the market.
This initiative aligns with broader efforts to increase competition in electricity supply, with the Authority setting targets for private suppliers to capture a 47% market share by 2027. The changes also affect energy storage, proposing an end to supplementary tariffs for peak-hour electricity injection due to falling battery prices. The overall direction is a move towards less fixed support and more exposure to market prices and competition, requiring developers to refine cost and planning accuracy. The public can submit comments on the proposal until November 10, 2026, with a final decision expected in the coming months.
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