Israel Electricity Authority Proposes Cuts to Rooftop Solar Tariffs
Israeli homeowners and roof owners who miss the upcoming deadlines face a sharp reduction in government-backed payments for electricity produced by new rooftop solar panel systems, according to a draft decision published by the Electricity Authority. The proposed policy shifts tariffs downward by 5% annually between 2027 and 2030, eventually lowering payments to about NIS 0.35 per kilowatt-hour, en.globes.co.il reported on October 20, 2026.
Deadlines and Tariff Reductions Through 2030
Property owners who installed solar panel systems prior to the announcement have secured high payment rates of NIS 0.48 per kilowatt-hour, or NIS 0.54 in major cities qualifying for an urban premium, locked in for 25 years. The same rate applies to any applicant who submits a grid-connection application by the end of 2026 and completes installation within one year.
For systems connected between 2027 and 2030, the fixed payment drops by 5% each year. Systems installed in 2027 will lock in payment terms for a shorter duration of 20 years, concluding in 2047. By 2030, the rate for new residential installations will fall to roughly NIS 0.35 per kilowatt-hour, subject to foreign currency exchange rates.
Foreign currency exposure will accelerate the decline. The Electricity Authority established an indexation mechanism where 40% of foreign exchange fluctuations—split evenly between the US dollar and the euro—reflect directly in the price. Because the calculation uses a base separate from current market exchange rates of NIS 3.70 per dollar and NIS 4 per euro, currency shifts will erode the 2027 price further, pulling it down to about NIS 0.43 per kilowatt-hour as early as the second half of that year.
The Shift Toward a Market Model
Approximately 10% of every consumer electricity bill—amounting to roughly 3 billion shekels annually—consists of excess costs from subsidizing renewable energy. Because Israel operates a closed electricity sector, every shekel transferred to subsidized producers is paid directly by consumers.
To reduce this public burden, the Electricity Authority is promoting a transition from a fixed feed-in tariff to a market-driven model. Under this new framework, rooftop owners can sell electricity to private suppliers, supplemented by a regulated government premium. For example, a small residential rooftop of up to 15 kilowatts would receive a government premium of NIS 0.235 per kilowatt-hour in 2027, requiring private suppliers to offer at least an additional NIS 0.195 to beat the guaranteed tariff.
Starting in 2028, owners of medium and large rooftops exceeding 15 kilowatts will submit competitive price proposals for the electricity they generate. Systems offering lower prices gain priority for grid connection, while higher bids wait in line. Small rooftops under 15 kilowatts remain exempt from this competitive queue and connect automatically.
Market Participants Disagree on Solar Rooftop Targets
Market participants hold contrasting views on how the tariff cuts will affect installation volumes and whether Israel will reach its target of adding 100,000 solar rooftops.
Adam Cromer, CEO of solar comparison platform GreenDays, noted that a Ministry of Energy awareness campaign triggered an uptick in demand. Installers are adjusting operations by becoming more selective and focusing on highly motivated clients rather than complex projects that require electrical grid upgrades.
Conversely, Eitan Parnass, CEO of the Green Energy Association of Israel, expressed concern that the proposed policy changes cause a market shock.
The public can submit comments on the Electricity Authority draft decision until November 10, 2026.