George Papanastasiou, the minister of energy, commerce and industry (MECI) in Cyprus, recently presented the ‘Photovoltaics for All' scheme, which is the country’s latest attempt to expand residential solar installations. The new program has a budget of €30 million ($32.4 million) and will launch officially in January, with a focus on homeowners and apartment owners, but excluding renters.

‘Photovoltaics for All' will build on previous schemes for renewable energy by eliminating the need for initial investor capital, shifting the responsibility of purchase and installation costs directly to registered installation firms, streamlining paperwork, and accelerating the administration process. The new program will only fund systems up to 4.16 kW of PV capacity per household and the participating households will need to pay the investment back via €150 installments, payable to their power supplier every two months through their electricity bills.

Papanastasiou stated that a household consuming an average of 825 kWh every two months currently pays around €280 for electricity. However, with a 3 kW PV system installed, the cost can drop to €195 every two months, reaching as low as €45 every two months after the installation payback period of about three to four years.

The new program for the installation of residential photovoltaics comes at a time when electricity consumers are complaining about the escalating costs of powering their homes. However, there is no alternative option because the country’s retail electricity market is not open to alternative suppliers. The lack of competition means prices remain high.

About a decade ago, Cyprus promised the European Union to open its wholesale and retail electricity markets to competition. However, the opening of the retail market to independent producers has yet to happen, allowing the incumbent utility to dominate the retail market and the electricity consumers to suffer the economic consequences.

On the wholesale market front, things are slightly better. Given the lack of a competitive wholesale market, the government decided in 2017 to establish a transitional wholesale regime, which allows independent generators to sell power to large business and industry consumers only. Today, there are several independent generators who use photovoltaics to power large businesses and the industry at cheaper prices.

Cyprus urgently needs to implement the new, competitive electricity market structure it has promised the European Union. In doing so, the country will install greater amounts of solar than it would through its subsidy schemes.