Israeli homeowners are ready to storm the solar frontier
After years of lagging behind other Western countries, Israel’s solar electricity production is looking to private homeowners to heat things up
If there is one thing Israel has in abundance, it’s sunlight. This was not lost on the country’s founders, who laid the groundwork for solar energy use soon after the Jewish state was founded in 1948. But seven decades later, Israel is lagging behind other Western countries with respect to making the most out of this powerful, renewable resource.
In an effort to change this gloomy situation, the Public Utilities Authority — a government agency more commonly known as the Electricity Authority — is now calling on private homeowners to join the energy market by installing electricity-generating solar panels on their roofs.
A signatory to the 2016 Paris Climate Accords, Israel committed to optimizing its energy consumption and generating at least 10 percent of its electricity using renewable energy sources by 2020.
As of 2018, it didn’t look like Israel would be able to meet this objective, but the latest changes the Electricity Authority has introduced into the solar energy market — especially the lifting of bureaucratic impediments — have seen an increase in electricity production by private contractors, as well as an uptick in the interest shown by private homeowners.
In September 2018, the Electricity Authority, which is tasked, among other things, with promoting renewable energy initiatives, offered a 50-megawatt quota for private homeowners seeking to install solar panels on their rooftops.
This was meant to allow private homeowners to produce electricity for their own consumption, offsetting their utility bills, as well as to sell any excess electricity to the state-owned Israel Electric Corporation, which builds and maintains Israel’s entire power infrastructure.
Being a monopoly, the IEC is defined as a strategic national service provider and as such, it is obligated to purchase the electricity produced by private companies and individuals.
According to IEC data, the average Israeli home consumes about 8,000 kilowatt-hours (kWh) a year. A single megawatt can power upwards of 150 homes, so a 50-megawatt boost to the power grid is substantial.
Israel’s main power provider says that 80% of the quota — 39 megawatts — was claimed within a few weeks. Seeking to capitalize on this momentum, the Electricity Authority is now gearing up to issue a second 50-megawatt quota for the installation of solar panels on the roofs of privately owned homes.
The grid stands alone
In terms of electricity, Israel is defined as an “island,” meaning that it cannot rely on its neighbors for assistance in case its power grid comes under attack or experiences a catastrophic failure that could plunge the country into total darkness.
For this reason, the search for a stable source of energy supply is defined as a national priority.
The use of solar energy in Israel dates back to the early 1950s, with the introduction of solar water heaters in an attempt to address the energy shortage plaguing the fledgling state. This venture proved successful and today, 90% of Israeli households have solar water heaters.
Until the past decade, however, efforts to convert solar power into electricity were sluggish, despite the fact that Israel’s electricity consumption has grown by an annual average of 6%, again creating an electricity shortage.
Seeking to devise a solution, the Energy Ministry and the IEC have been investing considerable resources in searching for alternative energy sources and renewable energy technologies. But it wasn’t until 2008 that the government decided to subsidize solar-produced electricity as part of the ministry’s plan to explore renewable energy sources.
Meanwhile, private research into the use of solar energy and how it can be converted into electricity has progressed by leaps and bounds, making Israel a global powerhouse in the field.
Cutting red tape
Efforts to facilitate private electricity production in Israel date back to 1985 and are rooted in lengthy efforts to introduce far-reaching reforms in the IEC by allowing privately-held companies to enter the power production market.
But it was only in 2008 that the Electricity Authority — with the backing of the Energy Ministry, which issues grid distribution quotas for third-party electricity producers — introduced a mechanism designed to accelerate investments in renewable energy technologies.
This cleared the way for private companies to enter the field and as of 2018, some 23% of Israel’s electricity production comes from private power companies.
While to date there is no legislation in place mandating the installation of rooftop solar panels as part of the building code, it is clear that there is money to be made in private electricity production — a lot of money.
According to industry experts, what has been driving the uptick in the number of homeowners seeking to produce electricity is mainly the drop in the prices of the home solar systems they’d have to install — from an average of NIS 400,000 (roughly $114,000) to NIS 50,000-150,000 ($14,000-$42,500) — and the increase in the efficiency of solar panels, thanks to technological advancements.
Easy sell, tough application
The most recent campaign seeks to underscore two issues: economic viability and the elimination of grueling bureaucracy.
In terms of economic viability, since the IEC is committed to purchasing rooftop-produced electricity at a guaranteed rate, the investment in a solar system will yield returns on average after seven years. From that point on and until the end of the panel’s life — another 18 years — the owners will enjoy a fixed monthly income.
But while the financial benefits were an easy sell to the public, head of Renewable Energy Sector in the Electricity Authority Gal Shofrony says that raising public awareness of the fact that many of the bureaucratic barriers have been removed called for a special campaign.
“People were afraid of looking into it because they heard about the endless paperwork and being given the run-around,” he told Zman Yisrael, the Hebrew sister site of The Times of Israel. “Now we’ve cleared all that up. There’s no income tax involved, no added-value tax — all you have to do is email the IEC that you want to join the program.”
The Electricity Authority said that after launching the campaign earlier this year, the number of applications for panel installations doubled compared to the same period in 2018.
Adam Kromer, the driving force behind “100KSolar,” an initiative aspiring to see at least 100,000 rooftops in Israel carry electricity-generating solar panels, assists private homeowners through the process of contracting the companies installing them.
Kromer’s initiative started back when harnessing solar energy for private consumption was a pipe dream shared by environmental idealists, but now, he says, things are heating up.
As this is a relatively new field, many homeowners are unfamiliar with regulatory demands, the players in the market, and the necessary investment, which is why they are wary of pursuing it, he explained.
“Unlike the large solar farms, which are owned and operated by tycoons and corporations, rooftop energy production is a democratization of the electricity sector. Anyone can become a producer, and in the last few weeks, more and more people are showing interest in that. I hear that from [solar panel] installation companies as well,” Kromer said.
But while solar panels are popping up on privately owned rooftops left and right, most condominium tenants seeking to do the same find that they can’t.
The reason is simple: installing solar panels on a condominium rooftop requires the full consensus of the tenants. By contrast, only two-thirds of the tenants have to give their consent for their building to undergo, for example, the massive renovation entailed in earthquake reinforcement projects.
“Getting everyone’s consent is extremely hard,” Kromer said. “It’s hard to convince everyone to agree to a project that, while profitable, isn’t worth millions, like adding floors to the building.”
Shofrony agrees. “Beyond the need for consent, urban rejuvenation projects are killing it [solar panels initiatives]. Nearly every building sees itself as a candidate for such projects and as long as that option exists, people won’t invest in solar panels that will only generate profits in the long run,” he said.
But what about public buildings? There are thousands of public and government buildings in Israel, but their rooftops are not used to produce green energy.
It is worth noting that the Israeli parliament is trying to lead by example and in 2015, as part of the “Green Knesset” initiative, 1,500 solar panels with a capacity of 450 kilowatts were installed on the compound’s rooftops. The project was designed to generate some 10% of the Knesset’s electricity needs and save it about NIS 1.5 million ($427,000) annually.
Prior to joining the Electricity Authority, Shofrony headed the Economic Planning Branch at the Public Security Ministry, where he promoted a plan to cover the rooftops of prisons, police stations and firehouses with solar panels.
The pioneering project, however, was unable to break through the bureaucratic hurdles in its way.
On August 9, the IEC announced that a record-breaking 14% of the electricity produced in Israel came from renewable energy sources. It was a bright but brief moment of pride; solar-generated electricity currently makes up only about 6% of consumption, lagging far behind most Western countries, which have fewer annual hours of sunlight.
Shofrony believes a state agency has to be formed to oversee the issue of utilizing public rooftops, saying, “The state has to help municipalities promote this issue. After all, there’s money to be made here — it’s not just an environmental project.”
According to Kromer, Israel has an average of 1,800 hours of annual sunshine. If all the rooftops in Israel were covered with solar panels, said Kromer, solar energy could meet up to 50% of the country’s electricity needs.
A version of this article first appeared in Hebrew on The Times of Israel’s sister site, Zman Yisrael.
