Israel Solar Industry on Hold While Awaiting Policies

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Israel set a goal in October of installing 340 megawatts of solar power. Developers are still waiting for the government to provide the details they need to move forward.

“Development has been a hard grind,” said Jon Cohen, chief executive officer of Arava Power Co. “Everything has gone slow and hard.”

Arava, based in Kibbutz Ketura, Israel, is developing 12 solar projects in the country with 200 megawatts of capacity and can’t begin construction without more information from the government, Cohen said.

“We have been waiting since the beginning of 2013 for the additional quotas for PV. In October 2014, the government finally approved another 340 megawatts for PV but has yet to publish the relevant regulation to activate this quota.”

The regulations may be finalized this year, said Yuval Zohar, head of renewable energy at Israel’s Ministry of National Infrastructure, Energy and Water Resources.

“We’ve gone through public elections, a new minister came in and we assume that due to the importance and complexity of that issue, the regulation for these additional quotas will be finalized in the short run, hopefully within the framework of 2015,” he said. The government “is already in the process of preparation for” an energy auction for 30 megawatts of solar capacity.

Israel has set a target of getting 10 percent of its electricity from renewable sources by 2020. Last year it got about 2 percent.

Israel’s solar industry attracts $200 million to $300 million in annual investment, according to Eco Energy Financial & Strategic Consulting, a Herzliya Pituach, Israel-based energy research company. Most of that comes from local banks and domestic investment funds.

Cheap Gas

The slow progress on solar policies is due in part to large natural gas fields discovered offshore in recent years that now account for about 60 percent of the country’s power, said Amit Mor, CEO of Eco Energy.

“This is the biggest challenge to the renewables sector,” Mor said in an interview. “Relatively cheap natural gas is an obstacle to the willingness of the government to further promote the penetration of solar energy and other renewables.”

The Tamar gas field was discovered off Israel in 2009 and the Leviathan field a year later. Combined they hold an estimated 29 trillion cubic feet of natural gas, more than the country could consume in decades.

Arava completed the 40-megawatt Ketura project last week, Israel’s largest grid-connected solar farm. The $79 million power plant is jointly owned with France’s EDF Energies Nouvelles SA.

“We are hoping for regulations by the end of 2015 and to be building additional solar fields by 2016,” said Cohen. “For Israel to meet its 2020 target, the industry needs to add an additional 500 megawatts to 700 megawatts of capacity.”

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