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The debate over the cost of electricity in Cyprus has focused attention on the price at which renewable energy is generated and sold, with claims that photovoltaic producers can generate electricity for as little as 7 or 8 cents per kilowatt-hour before selling it to the market for 25 or 30 cents.
The Electricity Market Association (EMA) disputes that picture, arguing that the figures do not reflect how the electricity market operates or the actual economics of running a solar installation.
According to the association, private renewable energy producers participating in the Competitive Electricity Market accounted for about 6.4% of total electricity traded during the period examined. This amounted to 262 GWh of solar power traded in the Day-Ahead Market.
The association says this share alone makes it mathematically impossible for a reduction in the selling price of this electricity to produce a 20% reduction in the total electricity bill.
A market simulation using a price of 11 cents per kWh for the solar energy in question would reduce the overall electricity bill by approximately 1.8%, according to the EMA.
Average solar-hour price was about 11.8 cents
The association also rejects the claim that photovoltaic producers routinely buy or generate electricity at 7-8 cents per kWh and then sell it for 25-30 cents.
Official data covering the first six months of the Competitive Electricity Market show that the average electricity price during solar-generation hours was approximately €118 per MWh, equivalent to 11.8 cents per kWh.
The Electricity Authority of Cyprus already has the ability to procure renewable electricity from projects with a combined installed capacity of 416 MW at 11 cents per kWh under a regulatory decision, according to the association.
The EMA argues that comparing the theoretical cost of producing one kilowatt-hour with the eventual selling price does not provide a complete picture of the economics of a photovoltaic investment.
Curtailments can substantially increase the real cost
One of the main issues identified by the association is the amount of renewable electricity being curtailed because the system cannot absorb all available generation.
Between January and May 2026, photovoltaic projects experienced curtailments of around 60% to 65%, according to the EMA.
This means that a project with a theoretical generation cost of 5–7 cents per kWh can face a much higher effective cost when a substantial proportion of its potential output cannot be sold. The association estimates that the real cost can reach approximately 12.5 to 20 cents per kWh in such circumstances.
Other expenses also have to be taken into account, including financing, operation and maintenance, losses and periods when electricity prices are extremely low or even zero.
The EMA therefore argues that the central issue for Cyprus is not simply the price at which renewable producers sell their electricity, but the country's ability to make use of the low-cost renewable energy already being produced.
Storage seen as key to using more solar power
Energy storage is one of the measures the association identifies as capable of changing the situation.
The EMA says storage installations at existing renewable-energy parks could help make more solar electricity available to the system instead of having it curtailed. However, it argues that investment is being held back by bureaucratic requirements and complex procedures involving the Distribution System Operator.
The association says there is significant investor interest and that the market is ready for storage projects, arguing that delays leave Cyprus dependent for longer on more expensive and polluting forms of electricity generation.
Electricity bills depend on several factors
The EMA also points out that the final price paid by consumers is determined by several components rather than by the price charged by one category of electricity producer.
These include the cost of conventional generation and fuels, emissions costs, electricity-network expenses, the operation of the market and the country's overall energy mix.
For this reason, the association says reducing electricity prices requires action across several parts of the energy system.
Its proposals include bringing natural gas to Cyprus as soon as possible, ensuring the Competitive Electricity Market operates effectively, reducing renewable-energy curtailments, speeding up licensing for energy-storage systems, upgrading electricity networks and giving consumers more genuine choices.
Increasing generation capacity is another priority identified by the EMA. It also points out that Cyprus' first private power plant remains out of operation despite being ready to add new generation capacity to the system.
The association's position is that cheaper electricity will ultimately depend on allowing more renewable energy to reach consumers, expanding storage and generation capacity, improving the electricity network and reducing reliance on expensive conventional fuels.
For Cyprus, the challenge is therefore not simply determining whether solar electricity costs 7, 8 or 11 cents per kilowatt-hour. The more fundamental question is how much of the country's available low-cost renewable generation can actually be delivered to consumers.
