Israel Plans Major Solar Roof Tariff Cuts to Curb Electricity Costs and Boost Storage
Israel's Electricity Authority is set to overhaul the tariff system for solar roof owners, with the current fixed rate of 48 to 54 agorot per kilowatt-hour (kWh) expiring at the end of 2026. The Energy Ministry proposes a new model that segments solar roofs by size, aiming to reduce tariffs and encourage energy storage to stabilize the grid and control future electricity price hikes.
Under the proposed plan, small residential roofs up to 30 kW will retain a fixed tariff but at a significantly lower rate, potentially dropping to around 35 agorot per kWh, down from the current 48-54 agorot. This tariff will decrease by 1% each quarter to incentivize rapid solar installations. Medium-sized roofs (30-100 kW), such as schools and small malls, will receive time-of-use tariffs, cheaper during the day to reflect solar production surplus and higher at night to promote battery storage. Large roofs (100-630 kW), including commercial centers and factories, will move to a competitive market price model with subsidies to offset their disadvantage compared to large solar fields.
This tiered approach aims to reduce the financial burden solar roofs place on overall electricity tariffs, which under the current system could increase costs by nearly 900 million shekels (about 2.5%) if 150,000 new roofs are installed. The new model is expected to cost significantly less and provide clearer economic certainty for solar project developers ahead of the current tariff's expiration.
The Energy Ministry has launched a campaign urging installations this year to lock in the higher current tariff for 25 years, warning that waiting until next year will mean accepting lower rates. The Electricity Authority will finalize the model after public feedback and further adjustments. Additional alternatives under consideration include private electricity suppliers setting prices and competitive bidding for roof tariffs.
The Energy Ministry emphasized its commitment to maximizing renewable energy to meet the government's 30% target by 2030, balancing cost reduction, grid benefits, and market stability while avoiding rapid changes that could stall progress.
