Israeli election matters for PV industry

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The Israeli election on Tuesday between Prime Minister Benjamin Netanyahu and his primary challenger Isaac Herzog was close, but exit polls indicate a resounding victory for Netanyahu’s Likud Party, which is expected to form a far right-wing government rather than a grand coalition with Herzog’s left-of-center Zionist Union alliance.

The election results are significant for the country’s PV industry. pv magazine recently predicted 2015 would be a decisive year for Israel’s solar PV sector and Netanyahu’s new government is now expected to set a new course for the country.

The Israeli solar industry is waiting to see how the new government will remunerate the 520 MW of quotas for 2020 that the Netanyahu administration recently diverted from various types of renewable energy to solar PV.

Israel has developed in the past a rather complex set of remuneration policies for solar PV, which includes fixed feed-in tariffs (FITs), variable FITs, land tenders and net-metering. Presently, there are no FITs for new photovoltaic projects and only land tenders and net-metering remain in place.

The Netanyahu government had made it clear that it envisaged a model of solar development in which future PV systems would be installed either using net-metering or based on competitive tenders, with the lowest FIT tendered getting the license to build the plant.

The Public Utilities Authority (PUA) has furthermore surprised investors with its rock-bottom tariff for the 50 MW Timna solar farm, which was finally set at ILS 0.39 ($0.097) per kilowatt hour for 20 years.

It has taken Israel’s government a long time to decide how much of solar PV it wants to install and the past policy experiments around various remuneration frameworks should have helped it to reach a decision by now.

Renewable energy didn’t play a significant role in the election debates but it does have a vital place in Israel’s economical, environmental and geopolitical agenda. The new government will need to unveil plans to increase the country’s electricity generated from renewables from just 1% now up to 10% by 2020, which is Israel’s national target.