Homeowners across Cyprus have recently encountered a significant shift in their adoption of renewable energy technologies. The application window for solar panel installations under the previous net metering system officially closed on December 31st, concluding an era of direct, equivalent credit for exported solar energy. This transition ushers in a new regulatory environment designed to alleviate considerable pressure on the national electricity grid. Commencing January 1st, 2026, all newly installed solar systems will operate within the net billing framework, fundamentally altering the compensation structure for surplus energy and prioritising energy storage solutions.
For an extended period, the net metering scheme offered a compelling financial incentive for homeowners to invest in photovoltaic (PV) systems. This encouraged individuals to offset their electricity expenses by receiving full credit for every kilowatt-hour of solar power directed back into the Electricity Authority of Cyprus (EAC) network. However, the escalating popularity of solar energy, further propelled by the widespread deployment of smart meters, has imposed an unprecedented demand on the grid's existing capacity. Evidence of this strain became apparent in early 2025, with reports indicating that approximately 145 gigawatt-hours of surplus solar electricity could not be effectively integrated into the network. This situation underscored the critical necessity for a revised strategy in managing the increasing influx of renewable energy.
Consequently, the Cypriot government, in close collaboration with the EAC, has implemented the net billing system. In contrast to net metering, which effectively treated exported energy as a direct offset against consumption, net billing operates on a more segmented basis. Under this revised system, energy supplied to the grid will be remunerated at a wholesale rate, inherently lower than the retail price paid by consumers. Conversely, electricity acquired from the grid will be billed according to the standard retail tariff. This strategic adjustment aims to foster a more proactive approach to energy management, encouraging homeowners to maximise self-consumption and, crucially, to invest in energy storage technologies rather than solely exporting excess power.
While direct financial incentives for solar panel installations have been discontinued with the introduction of net billing, the government has reaffirmed its dedication to supporting energy storage initiatives. Beginning January 1st, 2026, homeowners will become eligible for subsidies specifically allocated for the installation of battery storage systems. This crucial measure is designed to complement the net billing framework by enabling individuals to store surplus solar energy generated during daylight hours for later use during peak demand periods or at night. Such a strategy will significantly reduce reliance on grid power and contribute to mitigating overall grid congestion.
The EAC has acknowledged the substantial volume of approximately 4,000 pending applications for solar panel installations submitted before the deadline. The authority has committed to expediting the processing of these applications, ensuring that individuals who acted promptly under the former net metering regulations are not adversely affected. Nevertheless, for any homeowner contemplating a solar installation from this year forward, a comprehensive understanding of the net billing system and its implications for compensation and energy management is now absolutely essential. This transition represents a profound recalibration, promoting a more sophisticated and sustainable model for domestic renewable energy generation and consumption throughout Cyprus.