Subsidising investment for renewable energy and energy saving measures in vulnerable homes in Cyprus
About this good practice
The Renewable Energy Sources (RES) and Energy Conservation (EC) Fund (the Fund) is the main financial tool of the Republic of Cyprus to promote RES and EC, with a view to achieving the binding national targets. In addition, it aims to provide energy upgrades for old buildings and reduce energy costs. Category 3B of the fund, which is named “Installation of Photovoltaic System using the Net Metering method in existing dwellings” provides sponsorship for installation of solar PVs in the homes of vulnerable consumers. Vulnerable consumers are defined as are Individuals who, either themselves or another person with whom they live permanently in the same house and with whom they have a first-degree kinship, is a vulnerable consumer of electricity – large families who receive welfare benefit, recipients of care or disability allowance, recipients of public assistance, minimum guaranteed income and low income pensioners. These consumers can receive 750€ per kW Photovoltaic System up to a maximum amount of 3,750€.
Expert opinion
The question is: who pays the electricity bill for vulnerable groups. If it is the vulnerable consumer in a low-income household or on social welfare, the monthly electricity bill is a recurring burden. If the kWh electricity is on top as expensive as in Cyprus and the electricity needs a high due to a hot climate with need for airconditioning, the burden can easily become a deep financial drain.
In such settings, the promotion of PV for self-consumption is an excellent strategy as a one-time support will result in a very long-term benefit.
What remains not fully convincing is the requirement for vulnerable groups to put up part of the upfront investment costs, probably about 50% of CAPEX: this will in itself be a barrier to the general deployment of such systems for vulnerable groups who rarely have extra money to put on the table at once. It would be worth the while looking into options to pay back the own financing contribution in monthly instalments as such a payment method is more compatible with the financial situation of the target group. On top, the beneficiaries would experience savings from their usual electricity bill that would free every month the capital to pay part of the CAPEX.
Resources needed
Fund budget amounts to 8.1 million euros, expected to cover 6,500 applications
Evidence of success
Up to end of December 2020, there were 725 applications from vulnerable consumers, of which 434 were accepted, for solar PV installation using net metering and 1,356 applications from non-vulnerable consumers. In 2020, 83 new PV systems were implemented.
Potential for learning or transfer
This fund, which is specifically allocated to increasing the use of renewable energies, as well as having an energy efficiency aspect, has the potential for replication in many areas where solar PV is a financially viable and a year-round possibility. By providing a high subsidy to vulnerable consumers in receipt of certain benefits or who are elderly, or disabled, there is an increased incentive to implement renewable, cheap electricity in
households who might otherwise struggle to pay their bills, without having to pay a large upfront bill.
Further information
Website
Good practice owner
You can contact the good practice owner below for more detailed information.
Ministry of Energy, Trade and Industry