Israel’s Ministry of Energy and Infrastructure is planning to introduce new tariff rates for surplus rooftop solar power under net metering.

The proposals relate to the sell-back of excess electricity to the grid from home solar installations used for self-consumption. Under current law, the tariff is set at ILS 0.48 ($0.13)/kWh for a fixed 25-year period.

The first track will offer a quicker return on initial investment via a higher tariff over the first five years, followed by a lower tariff thereafter. The proposed tariff is set at ILS 0.6/kWh for the first five years, before being cut to ILS 0.3807/kWh.

The tariff track will be available for installations up to 30 kW, but the higher rate over the first five years would only be applicable to the first 15 kW.

The second tariff should be linked to the Consumer Price Index for installations up to 15 kW. The tariff is lower, at ILS 0.39/kWh, but will increase in line with inflation as inflation rates increase.

The proposal is designed to address concerns that the real value of rooftop solar may erode in cases of high inflation under the current fixed tariff.

Guidance on the proposals, available on the ministry’s website, says that as the rate in the fast track decreases and the rate in the index-linked route is updated upward, differences will be offset, ensuring the total amortized payments to the manufacturer remain the same.

The proposed tariffs form part of Israel’s plan to install solar panels on 100,000 new roofs, first announced in February.

The ministry has opened a consultation into the two tariff tracks, which is accepting written feedback until April 4.

Annual return rate by tariff. The grey line represents the current track, the orange line represents the rapid return-on-investment track and the blue line represents the index-linked track.

Image: Israel Electricity Authority