**Nicosia, Cyprus –** Homeowners across Cyprus have reached a pivotal juncture in their transition to renewable energy, as the deadline for applying for solar panel installations under the established net metering system officially passed on December 31st. This marks the end of an era for direct, one-to-one credit for exported solar energy, ushering in a new regime designed to address mounting pressures on the national electricity grid. From January 1st, 2026, new solar installations will operate under the net billing framework, a system that fundamentally alters how surplus energy is compensated and encourages a greater emphasis on energy storage.
For years, the net metering scheme provided a straightforward incentive for homeowners to invest in photovoltaic (PV) systems, allowing them to offset their electricity bills by receiving full credit for every kilowatt-hour of solar power they fed back into the Electricity Authority of Cyprus (EAC) network. However, the burgeoning popularity of solar energy, amplified by the ongoing rollout of smart meters, has placed an unprecedented strain on the grid's capacity. Evidence of this strain emerged in early 2025, with reports indicating that approximately 145 gigawatt-hours of surplus solar electricity were unable to be integrated into the network. This situation underscored the urgent need for a revised approach to managing the influx of renewable energy.
The Cypriot government, in collaboration with the EAC, has therefore transitioned to the net billing system. Unlike net metering, which effectively treated exported energy as a direct credit against consumption, net billing operates on a more compartmentalised basis. Under this new paradigm, energy sold to the grid will be remunerated at a wholesale rate, which is inherently lower than the retail price consumers pay. Conversely, energy purchased from the grid will be billed at the standard retail tariff. This shift is strategically intended to encourage a more dynamic approach to energy management, steering homeowners away from solely exporting excess power and towards maximising self-consumption and, crucially, investing in energy storage solutions.
While direct subsidies for the installation of solar panels have been phased out with the move to net billing, the government has signalled its commitment to supporting energy storage. From January 1st, 2026, homeowners will be eligible for subsidies specifically targeting the installation of batteries. This initiative is designed to complement the net billing system by enabling individuals to store surplus solar energy generated during daylight hours for use during peak demand periods or at night, thereby reducing reliance on grid power and further mitigating grid congestion.
The EAC has acknowledged the significant volume of approximately 4,000 pending applications for solar panel installations that were lodged prior to the deadline. The authority has pledged to expedite the processing of these applications, ensuring that those who acted promptly under the previous net metering framework are not unduly disadvantaged. However, for any homeowner considering a solar installation from this year onwards, a thorough understanding of the net billing system and its implications for compensation and energy management is now paramount. The transition represents a significant recalibration, promoting a more sophisticated and sustainable model for domestic renewable energy generation and consumption in Cyprus.