Cyprus installs largest rooftop PV under net billing program

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The Muskita Aluminium Industries factory in Limassol now boasts the largest solar rooftop in Cyprus.

The 2.5 MW system, which occupies 13,500m², was inaugurated by president Nicos Anastasiades and is expected to provide 30% of the firm’s electricity needs.

The PV rooftop, installed by the Conercon Energy Solutions subsidiary of Cypriot conglomerate Lanitis Group, will operate under the island nation’s net billing regime.

Cyprus’ net billing scheme

Cyprus, which also operates a conventional net metering regime, introduced net billing last year as a way of ensuring solar power systems with a generation capacity of 10 kW-10 MW do not drain funds from grid operators.

Owners of PV systems – residential and commercial – are only eligible for net billing if their arrays will provide a maximum 80% of their annual energy needs, although that capacity can rise to 100% if an energy storage system is included.

Customers are billed on energy consumed from the grid at the retail electricity price and receive a credit based on a variable tariff known as the ‘avoidance cost’ for any excess power they inject back into the grid during each two-month billing period. The avoidance cost is intended to reflect the savings offered the country by avoiding the generation of fossil-fuel based energy.

The key difference between net billing and net metering is that the former protects grid operators against financial outlay. If the PV system owner generates more power than they consume during any two-month period, the avoidance cost credit is rolled over into subsequent billing periods and is likely to be cancelled out over the course of each year because of the constraints applied to the generation capacity of eligible arrays. In the unlikely instance of a system owner exporting more power to the grid than they consume, the excess does not secure any credit.

Prosumers pay levies for the self-consumed energy

Prosumers who qualify for net billing are taxed on all the energy they consume, whether generated on-site or imported from the grid, and also pay a fee for using the network.

Venizelos Efthymiou, chairman of the research center for sustainable energy at the University of Cyprus, explained the rationale behind the grid fee to pv magazine.

“When you install intermittent generation to satisfy your energy needs, this is inherently dependent on the availability of the resource, e.g. the sun,” said Efthymiou. “Since there are cloudy days when self-generated energy is not enough, prosumers rely on the network to safeguard the security and continuity of their power supply. Thus, the Cypriot regulator has conducted a detailed analysis identifying the cost of the network support to prosumers. Once this cost is estimated, it is distributed on the annual energy consumed by the prosumer so as to keep it simple and as low as possible.

“What is not correct, though, and has to stop at some point, is levies and [a] green tax on self-generated and self-consumed energy.”

The largest PV system to date which will be supported by the net billing policy is the University of Cyprus’ planned 5 MW solar park, which is set to include a 2.35 MWh battery storage system.

Cyprus’ solar PV

Cyprus has around 130 MW of installed solar capacity and aims to generate 16% of its electricity from renewables next year, with government figures insisting it is on track to meet that ambition. Solar is part of a clean energy mix on the island which also features 157.5 MW of wind power capacity and 10 MW of biomass and biogas facilities.