Campaign urges Israelis to put solar panels on the roof, make money…eventually

With dwindling land resources, government looking upward in race to meet 2020 target of generating 10% of all energy from renewable sources

Sue Surkes is The Times of Israel's environment reporter

Electricity-generating solar panels. (Danny Shechtman)
Electricity-generating solar panels. (Danny Shechtman)

Put solar panels on your roof and let them earn you money while helping to cut pollution — that’s the message of a new PR campaign rolled out by the Energy Ministry and the Electricity Authority.

Israel is falling behind government targets to have 10 percent of its electricity generated by renewable sources by 2020.

By the end of last year, just 3.5% of energy was renewably produced, and by December this year, that figure is expected to rise to only 5%.

To date, solar panels have been installed on around 13,000 roofs, the vast majority of them agricultural, commercial or industrial, such as shopping centers.

The aim is to double that number of roofs by the end of next year, largely by encouraging residential property owners to spend NIS 55,000 to NIS 150,000 ($15,500 to $42,300) on solar systems that become profitable after eight to 10 years. Prices of photovoltaic panels have come down by some 80% over recent years, according to the Electricity Authority, thanks to technological improvements and mass production in countries such as China.

Photo voltaic solar panels atop a cow shed on Kfar Vitkin. (Chen Leopold/Flash90)
Photo voltaic solar panels atop a cow shed on Kfar Vitkin. (Chen Leopold/Flash90)

With a 15-kilowatt (kW) solar energy system on a residential roof, investors will pay the regular rate for the electricity that they use (currently 47 agorot, or 13 cents, per unit of energy known as a kilowatt hour, or kWh), but will get a check back from the Israel Electric Company for the surplus that enters the national grid at the rate of 48 agorot per kWh, according to prices set in September. Although not linked to the Consumer Price Index, that price is guaranteed for 25 years from the date of installation — roughly the lifespan of the solar panels. Banks provide attractive, sometimes 100 percent loans on what they see as a risk-free investment, and income from a system of this size is free of income tax and VAT.

In addition to paying for the system itself (for which planning permission is not required and there are no municipal fees), the private investor has to pay for four things: an initial visit from a private electrician or IEC representative who will check the panels before they are connected to the grid; a second visit by the IEC after connection; installation of a meter costing NIS 350 (just under $100); and a fixed charge of a few tens of shekels each month.

A website has been set up (currently in Hebrew) to allow interested citizens to roughly work out how much money they could make, and to provide detailed information on how to go about installing the system.

A residential building with 100 meters (1,076 square feet) of available roof located in the center of the country, among both low- and high-rise buildings, for example, could save 9.7 tons of pollution annually and generate around NIS 7,500 ($2,115) per year after the first eight to ten years of paying off the initial investment.

Out of approximately 800,000 residential buildings in the country, some 500,000 are apartment buildings. In these, all apartment owners will have to agree to the purchase of a system and establish a mechanism for distributing the earnings.

With solar panel companies springing up like mushrooms after the rain and promising double-digit returns on the investment, Nurit Felter, head of the Electricity Authority’s strategy division, said that it was wise to obtain several price estimates, to check the companies well and to talk to friends and neighbors with such systems about their experiences.

New solar panels (foreground) and traditional water heaters with boilers (background) seen against the hills of the Judean Desert. (Danny Schechtman)

Most Israelis have long had solar panels on the roof to heat water. For the foreseeable future, they will have to find at least another 40 square meters (430 square feet) of roof if they wish to install the new electricity producing panels. Legislation is currently being prepared to enable contractors working on new construction to choose between the existing type of solar water boilers and the new system.

Israel has some 1,800 hours of annual sunshine. “Israel is small,” Felter told The Times of Israel. “We don’t have a lot of free land on which to put solar panels. But we do have plenty of roofs with good access to the sun and heat.”

Businesses with sufficient roof space to install systems of up to 100 Kw receive 45 agorot per kWh for electricity that goes into the grid. They have to compete for solar energy quotas via tenders and pay income tax on earnings of more than NIS 24,000 ($6,750) and VAT on income of over NIS 70,000 ($19,700).

One tender is currently in the process for floating panels on reservoirs, which confer the added boon of helping to limit water evaporation.

The current campaign to encourage more electricity production by solar energy can be traced to an announcement made by the regulatory Electricity Authority in late 2017 that an additional 1900 megawatts would need to be generated by the sun if the 2020 target on renewable energy was to be met, and proposing many of the incentives.

Energy Minister Yuval Steinitz envisages that 17% of energy will be produced renewably by 2030, although this is not yet formal policy.

The European Union aims have at least 32% of its energy coming from renewables by 2030. According to a World Economic Forum report published in February, renewable sources accounted for an average of 17.5% of EU electricity across the board by 2017, with Sweden deriving 54.5% of its energy from renewables, Finland 41%, Latvia 39% and Denmark 35.8 %. At the bottom of the pile is the Netherlands, which is 7.4 % behind its goal.

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