Newsroom
Cyprus is set to transition from the current net-metering system to net-billing for new residential solar energy systems, with the backing of the European Union. According to sources, this change is expected to take place by April 2025. The shift aims to help ease the pressure on the energy grid.
According to a report by Kathimerini's Dorita Yiannakou, in net-billing, energy users with solar panels will sell any surplus electricity they produce but do not use back to their energy provider. The payment for this excess energy will be based on a pre-set rate, which is often lower than the standard electricity selling price. This system differs from net-metering, where solar panel owners could essentially use the grid as a battery—storing excess energy for future use without needing to sell it back.
Net-billing is already a widely used model across Europe, working as a tool to balance energy consumption and production. One key advantage of net-billing is that it encourages consumers to invest in larger battery systems to store their excess energy. This allows for a better match between energy production and consumption times, unlike net-metering, which was often driven by government subsidies.
Additionally, as part of Cyprus’s green energy transition, the government is planning to launch a grant program in the fall aimed at encouraging the installation of battery storage systems in homes. This initiative is part of a broader effort to lower electricity costs for citizens while promoting renewable energy solutions.
The Energy Ministry has already rolled out a funding program to support energy storage systems combined with renewable energy sources. The program, running until March 28, 2025, has a budget of €35 million and is focused on reducing electricity costs for residents and advancing Cyprus's green energy goals.
For larger energy consumers, such as factories and businesses, the grant program is expected to attract significant interest. These systems will be crucial for meeting the internal energy needs of these facilities. Applications for the program began on February 14, 2025, with the goal of adding 150 megawatts of storage capacity, equivalent to 350 megawatt-hours of stored energy.
Meanwhile, Cyprus has also started a public consultation on a proposed amendment to the Electricity Market Regulation Law. This modification will allow for the construction of central energy storage systems managed by the Transmission System Operator. The new law, which was approved by the Cabinet in February 2025, aligns with EU directives aimed at improving the efficiency and operation of the electricity market.
Under the new law, the government plans to install hybrid systems with batteries to store green energy starting in 2026. By 2030, around 160 MW of storage capacity is expected to be installed, helping to reduce energy cuts from renewable sources. Additionally, several applications for storage systems have already been submitted, with 13 proposals for 224 MW of storage capacity currently under review.
The Cyprus Electricity Authority (EAC) is also moving forward with plans to install storage systems at its Dhekelia power station, with proposals expected by the end of this month. However, there are concerns within the industry about the potential for monopolies and unfair competition. The Electricity Market Association (SAY) has raised concerns about certain government plans that could exclude private investors from the storage market.
As the country continues to navigate its energy transition, there is growing recognition of the role of hydrogen technology as a potential storage solution, with calls for government support in this area.
Consumers have voiced concerns as well. The Cyprus Consumers’ Association has welcomed the new law but emphasized that the costs of energy storage should not be passed onto consumers. Their main priority is ensuring a reduction in the overall energy costs, ideally no more than a cent per kilowatt-hour.
Cyprus is making significant strides in the green energy sector, and these changes are set to further reshape the energy landscape, promoting sustainability while balancing grid stability and cost efficiency.
