Stalled Israeli Legislation Threatens Solar Agro-Projects and Costs Developers Millions
Last-minute political deals ahead of the Knesset's dissolution have delayed approval of several pending bills, including a critical law that temporarily exempts agro-solar installations from betterment tax. Without this law advancing soon in the Knesset's Arrangements Committee, local authorities could impose exorbitant fees on agro-voltaic projects, rendering them economically unviable and potentially causing their collapse.
Agro-solar projects, which place solar panels over agricultural land, offer dual benefits by protecting crops from extreme weather and pests while providing farmers with stable income amid declining profitability. However, without a uniform tax exemption, municipalities can charge up to 50% of the land value increase, which can amount to hundreds of shekels per dunam annually, multiplied over lease years. This has already halted pilot projects, such as two research plots totaling 25 dunams that faced a 1.2 million shekel tax demand, stopping their development.
The Ministry of Agriculture and Ministry of Energy launched a pilot program in 2021 to promote agro-solar projects, but implementation was delayed due to regulatory and grid connection issues. Despite efforts led by Knesset Interior and Environment Committee Chair Yitzhak Kroizer and cooperation with the Energy Ministry, the bill remains stalled due to political maneuvering by coalition and opposition leaders. Energy Minister Eli Cohen has been criticized for not vigorously defending the legislation.
Industry groups, including the Green Energy Companies Association and the Kibbutz Movement, have issued urgent warnings to lawmakers that ongoing delays threaten projects in advanced planning stages and risk irreversible damage to Israel's renewable energy goals. They highlight the government's contradictory approach: promoting agro-solar projects while failing to resolve crippling tax burdens.
Recent statutory steps, such as the approval of a streamlined planning outline (TAMA 10/B/6) for agro-solar installations up to 80 dunams, were expected to accelerate growth in renewable energy, aiming to meet the national target of 30% electricity from renewables by 2030. Instead, uncertainty persists, risking costly delays and project cancellations. Minister Cohen maintains that some exemptions have been approved and expects the agro-solar framework to pass soon, assuring Israel will meet its 2030 energy targets.
