Israeli Planning Committee Exempts Solar Panels in Moshav Private Plots from Improvement Tax
The Israeli Planning Appeals Committee unanimously overturned local committees' decisions to impose an improvement tax on solar panel installations in "Plot A" areas of moshavim (cooperative agricultural villages). This precedent-setting ruling is expected to facilitate widespread development of small solar fields on privately owned agricultural plots across moshavim nationwide, potentially generating solar power capacity comparable to a full conventional power plant.
"Plot A" refers to privately owned land within moshavim, where members may build homes or cultivate crops. Many such plots remain unused as residents often avoid farming. Earlier this year, the Planning Administration's legal advisor, Attorney Efrat Brand, issued an opinion stating that improvement tax is unnecessary for these lands; instead, a fixed payment averaging 30,000 shekels per dunam would be made to the Israel Land Authority (ILA), which would compensate local authorities partially. This arrangement allows solar installations up to one dunam and 200 kilowatts capacity.
Local planning committees strongly opposed this exemption, fearing significant revenue losses from the increased land value due to solar development. Despite their resistance, when local farmers appealed the tax imposition, the Appeals Committee ruled in favor of the appellants. One notable case involved Luzi Shtilman from Moshav Bnei Atarot, who faced a 115,000 shekel improvement tax on a modest 211-kilowatt solar system plus a small storage unit. The committee ruled she need only pay the ILA fee, not the improvement tax, effectively saving her over 150,000 shekels.
The solar system has already been connected to the grid with support from solar developers Nofar Energy and Solar Farm, and received backing from Energy Minister Eli Cohen and Electricity Authority Chairman Amir Shavit. Solar Farm had initially paid the tax under protest, expecting reimbursement after the appeal, which was granted.
Roi Halevi, CEO of Solar Farm, praised the decision as "correct, just, and important," emphasizing its role in promoting renewable energy projects in rural areas and strengthening Israel's energy security. Attorneys Ronen Yardeni and Ram Mosseri, who represented the appellant, highlighted the ruling's legal and practical significance in removing economic barriers and providing regulatory certainty for solar energy development on moshav lands.
This ruling is expected to unlock thousands of dunams for profitable, decentralized solar power generation, advancing Israel's renewable energy goals.
