Israel to launch net metering pilot program for government buildings

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Israel’s Ministry of Public Security announced on Sunday that it would soon tender the construction of 13 net metering solar PV installations on the rooftops of police stations, fire brigades and prisons.

The country’s national police headquarters is one of the buildings where rooftop photovoltaics will be installed.

Gal Shofrony, senior budget coordinator at the Ministry of Public Security, told pv magazine the tender would be published in the next one to two months and that developers would be able to submit their bids immediately thereafter.

The cost of the installations is expected to reach a total $4.5 million, which will be covered by the ministry.

However, what appears to be at stake expands far beyond 750 kW of solar installations. According to the ministry, this is only the initial phase of a new initiative aiming to install photovoltaics at a large number of the country’s police stations, fire brigades and prisons. Therefore, the Blue Sky pilot project, including the first 13 rooftop PV systems, will serve as a basis to accumulate experience and develop the necessary know-how leading to the initiative’s further expansion.

For this reason, the ministry has set up a team mapping the potential geographic areas of development and identifying rooftops on hundreds of sites and buildings.

While the idea of deploying solar rooftops at the ministry’s buildings was born early, two recent factors pushed the developments significantly. Firstly, the ministry has seen a steady increase in its electricity bill over the past few years. Indeed, in 2013 in particular, the Ministry of Public Security’s electricity expenses reached about ILS 120 million ($34 million). Although the ministry had an adequate budget to cover it, the high sum pushed officials towards thinking of ways to cut down on electricity expenses.

Secondly came net metering. The ministry’s press release suggests that net metering is appropriate for developing the Blue Sky project because it doesn’t require public subsidies.

Shofrony agrees. "The ministry hesitated to install rooftop PV systems under the old feed-in tariff model because the generated income would come from taxpayers’ money. On the contrary, the net metering regulation that came into force in 2013 allows us to pay our electricity bills and furthermore generate income based on our own means," he said.

Shofrony added that the ministry had set up a fund to collect all savings generated via the Blue Sky photovoltaic installations and agreed to use it exclusively for the construction of additional rooftop PV systems, providing for the expansion of the program. Thus, "the initial €4.5 million invested in 13 PV rooftops will directly budget savings to the so-called ‘working capital’ fund whose purpose is to develop more PV systems that in turn will direct their savings to it as well, and so on," Shofrony explained.

A very helpful provision of the Israeli net metering regulation, Shofrony added, is that it "allows for small ‘sub-consumers’ under one major legal entity, such as the police department, to transfer kilowatt hour credits from a producing station to a non-producing one. This allows us to maximize our installation potential even in single large-scale rooftops because we know that energy credits will not go to ‘waste.’"

However, the ministry is also considering the option to develop rooftop PV projects in collaboration with private firms. In this case, the projects will be co-owned by the ministry and the private companies and the ministry will share the profits with them.

"We are standing today before a potential of hundreds of assets to install PV systems on. The ‘working capital’ fund mechanism is a good model but will take time – and so another plan is needed. Since our financial sources are limited we need a more immediate way to the implement our potential," he noted.

Israel’s solar PV sector

Israel’s parliament, known as the Knesset, had also tendered in April the installation of a 300 kW solar PV net metering rooftop system, which was finally won by the local solar company Solargreen.

The country’s Public Utilities Authority and Electricity regulator (PUA) approved the net metering regulation in December 2012 and also established net metering installation caps of 200 MW for 2013 and 200 MW for 2014.

To date, net metering installations stand at around 10 MW, while a further 20 MW are currently under development or very close to being approved.

The net metering regulation has indeed kick-started a healthy and competitive market in Israel, while the country has reached about 500 MW of installed photovoltaic capacity and has been seen in the last two years as a promising destination for solar PV firms.

Are international expectations of rapidly developing solar PV in Israel overestimated? pv magazine will seel to answer the question in its analysis of the Israeli PV sector in the forthcoming September issue.