The Public Authority Utility (PAU) was created in 1996 to fix electricity tariffs for the Israel Electricity Company and monitor its costs. The Authority also fixes premiums and feed-in-tariffs for renewable energy sourced electricity.
About 90% of domestic residences in Israel make use of solar water heating systems, which satisfies some 4% of the countrys total energy demand.
The PAU established new Solar PV and Wind feed-in-tariffs (FITs) in 2009.
1) The Ministry of National Infrastructure has set up a feed-in tariff for small and medium wind installations:
- For Wind production units of up to 10 KW, for self consuming and grid connected, the FIT is ILS 1.25/kWh
- For Wind production units of 10 W up to 50 KW, for self consuming and grid connected, the FIT is ILS 1.60 /kWh
These tariffs will be reduced by 2% each year from 2011, are valid for up to a national aggregate capacity of 30 MW and guaranteed for 20 years.
2) The Ministry of National Infrastructure also set up a feed-in tariff for residential and industrial solar photovoltaic installations:
- For PV systems of up to 50 KW for own consumption and surplus transfer to the grid, the FIT is ILS 2.01/kWh, equivalent to EUR 0.41, tariff valid for up to a national aggregate capacity of 50 MW or until 2014. From 2011 onwards, the tariff will decrease by 4% every year but for private installations up to 15kW where it will remain unchanged.
- For PV systems between 51 kW and 5MW, the tariff proposed by the PAU is ILS 1.49/kWh, equivalent to EUR 0.30. The tariff will be decreased by 5% each year from 201 and valid for up to a national aggregate capacity of 300 MW. Contracts are valid for twenty years and the Israel electric Company is obliged to purchase all PV produced electricity during the entire period. In July 2011, the Public Utilities Authority adjusted solar PV feed-in tariffs and extended the remuneration scheme to ground-mounted systems above 12 MW for connection to high-voltage grid. Tariffs have been set and adjusted as follows:
- For rooftop PV systems up to 50 kW, the FIT is ILS 1.51/kWh, tariff valid for a twenty-year period up to a 120 MW cap. The government approved an additional 110 MW through 2014 but new tariff levels are yet to be decided.
- For rooftop and ground-mounted PV systems between 51 kW and 12MW, the tariff is ILS 1.44/kWh until 50MW or end of 2011, ILS 1.37/kWh until an additional 65 MW or by end 2012, ILS 1.30/kWh until an additional 85 MW or end 2013 and ILS 1.23/kWh until an additionnal 100 MW or end 2014. The total cap therefore adds up to 300 MW.
- For ground-mounted solar systems between 12 and 60 MW, the awarded tariff is ILS 1.07/kWh, equivalent to EUR 0.21, ranges for a twenty year-period and up to a 400 MW installed capacity cap.
The feed-in tariff was closed for new applications in 2013 and replaced by a net-metering system.