Cyprus has announced a €1.5 million ($1.6 million) subsidy scheme that targets owners of electric vehicles (EVs) and hybrid cars, or vehicles that can be powered by both electric motors and internal combustion engines.
The new scheme is funded via the European Union’s Recovery and Resilience Facility (RRF), a post-pandemic recovery plan that EU leaders agreed upon in July 2020. The new Cypriot scheme will fund purchases and installations of solar panels at a rate of €750/kW, but capped at €1,500 per vehicle.
The new program will also allow households that own EVs or hybrid cars to claim a maximum of €2,000 (or otherwise, €750/kW) for the installation of battery systems. System owners will also be able to claim €600 on the purchase of charging stations, as well as €450 to convert their single-phase electric systems into three-phase power supply setups.
The scheme will run until Dec. 20, 2023, although should the available funds becomes exhausted, the program will close at an earlier date. Overall, the new policy is a much-needed step in the right direction for Cyprus, which currently generates only about 16% of its electricity via renewables.
Although the country's regulatory framework allows the installation of batteries behind the meter, it has failed to install any meaningful number of storage systems to date. This is primarily due to a lack of incentives to link home batteries to other schemes, such as the country’s net metering program.
The new policy – which combines solar, small batteries and EVs – could prove to be a game changer, given the country’s new scheme to support purchases of EVs. In late 2021, Cyprus rolled out €30 million of new subsidies for the purchase of EVs until the end of 2025, with support from the EU’s post-pandemic recovery plan.
Greece, on the contrary, made a disappointing announcement this week for a new €130 million subsidy for purchases of fuel for conventional cars.
Specifically, the government is supporting the purchase of fuel for 3 million cars and motorbikes, whose owners will receive about €30 to €50 each, either in cash or via a digital fuel-pass smartphone app that will provide them with free fuel at Greek gas stations.
Greece’s new fuel subsidy concerns all private vehicles whose owners have an annual income up to €30,000 and corresponds to the months of April to June. That means the government might expand the fuel subsidy after.
In contrast, Greece subsidizes the purchase of EVs with a €150 million budget for 2020-22, offering €50 million per year. The Greek government claims the conventional fuel subsidy will be necessary to tackle the recent spike in gas prices.
However, one cannot help but wonder why the government did not choose to support consumers via alternative ways that would also boost the country’s energy transition. For example, it could offer a scheme like Cyprus or use the digital pass to offer free tickets for public transportation, thus boosting energy efficiency and cultivating a greener lifestyle. However, the Greek government’s subsidy for dirty fuels is a populist measure to lure voters, indicating that its green rhetoric might not be as rooted in reality as it seems.
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