Israel is renowned for its strong economy, and advances in the areas of technology and research and development. Nevertheless, for a location with such a high level of irradiation and technical potential, it is not a major photovoltaics player.
Stefan de Haan, photovoltaics senior analyst IHS iSuppli tells pv magazine that total installed capacity at the end of 2010 was between 45 to 48 megawatts (MW). It is unclear, however, how much of this is comprised of residential PV and how much encompasses commercial or ground mounted systems.
While the feed-in tariff (FIT) was introduced back in 2008, progress, according to de Haan, has been "slow". Currently, residential systems up to 15 kilowatts (kW) in size receive a tariff of 1.67 Israel New Shekels (ILS) (around 0.33) per kWh, while the small commercial PV segment, which includes systems between 15 to 50 kW, are paid 1.44 ILS (around 0.29) per kWh. Meanwhile, systems above 51 kW receive a tariff of 1.49 ILS per kWh (around 0.30).
The first two market segments are not capped, but the last one is. "Theres a program running, which has a cap of 300 MW of these larger systems until 2014," explains de Haan. While he believes that 300 MW of cumulative installed PV capacity will be reached by then, he does not see the Israeli market turning into one which produces hundreds of megawatts annually.
"I think the program could be exploited," he stated, "but the start has been slower than the government targeted. The official underlying strategy is that they target ten percent of electricity produced by renewables until 2020, and thats why they have a PV roadmap. Part of that PV roadmap is for the medium and large systems – 300 MW until 2014 in total – and this is realistic. But, it does not translate into an annual market of 300 MW."
He continues: "In 2010, installations were around 37 MW, which is not too bad compared to small European countries like the Netherlands, but its still far away from hundreds of MW."
While de Haan believes the 300 MW cap could be reached by 2014, Gonzalo Baselga Navarro, sales manager for Soltec Renewable Energies states that the country could achieve it in between one and three years. He tells pv magazine: "We believe this will be even less than one year, because they [Israel] have a higher FIT than Germany, but with double production so double incomes, so it means this is a really profitable FIT."
In terms of system prices, de Haan says that the typical price for a small residential system is around 4 per watt. "In Germany," he states, "we are way below 3, just as an example. The FIT is not that much higher than in Germany, so the higher system price would have to be completely compensated by the higher irradiation. In the end Im sure ( ) the case makes sense, but its not so obviously great that investors – both private and institutional – would immediately rush into the country."
In the pipeline
Last week, Soltec Renewable Energies announced that along with Shikun & Binui Solaria, it was preparing to install one of Israels largest PV systems. Set to be located at the old Timna copper mines in southern Israel, the 7.5 MWp system is scheduled to be built this year. Navarro explains that construction is expected to begin soon. However, they are still waiting for the last permit to come through, although it was supposed to have been finalized over three months ago.
Soltec and Shikun & Binui Solaria are also looking to add another project worth 6.7 MWp within the next year. While Navarro was unable to disclose where the project will be located, or how much had been invested in it, he did say that the parties have already obtained two of the three permits needed to go ahead. "This means we will start at the end of this year or at the beginning of 2012," he says. He adds that the project will combine both roof and ground mounted systems.
Meanwhile, Siemens tells pv magazine that it has plans to build solar plants worth a total of 40 MW in Israel. A spokesperson says: "Siemens has concluded a framework agreement with Arava Power [of which Siemens Project Ventures holds a 40 percent stake] to build solar plants with a total output of 40 megawatts (MW). The first project under construction is a ground-based plant with an output of up to 4.9 MW at Kibbutz Ketura." The company did not divulge any further information.
Navarro of Soltec goes on to explain that the process of installing PV, while similar to those in Europe, can be very long and drawn out, and littered with administrative hurdles; something that de Haan also confirmed. "The most problematic thing in Israel is to find out a place to build, which will be authorized by the authorities," explains Navarro, "because you need a building permit, in order to access these buildings."
Of the three permits one must obtain – a building permit, a grid connection permit, and a permit stating you can receive the feed-in tariff – the last one is the most problematic, according to Navarro. He explains that once the first two permits have been granted, the Public Utility Administration then "looks into the project, into the permit of the utility and the building permit, and gives you the right to connect and to have the grant. Its complicated, because of time – normally, we see that its taking more than one year."
The Siemens spokesperson adds: "Start and completion of projects are heavily depending on approval process, which (…) underlies typical challenges in a still young market."
Whats more, Navarro says that Israel has reportedly set a regulation whereby local companies are not allowed to install PV projects unless they have an international partner with both experience and a track record. Although de Hann could not confirm if this was true or not, he did say: "I know that installers there are fighting with administrative hurdles and this could be a dramatic hurdle – or one of them at least. There are a thousand cons to this."
He concludes: "As long as there are enough foreign installers that detect that market on the landscape, then it works, but that could be some of the reason why it took a while for the market to get started."
Watch out for the May edition of pv magazine, which will be covering the Israeli PV market.