One of the key stages in the development of solar energy in Cyprus is coming to an end. On Wednesday, December 31, the deadline expires for submitting applications to install solar panels under the net metering system, after which the country will fully transition to a new billing model—net billing. These changes will affect tens of thousands of households and mark an important turning point in the island’s overall energy policy.
What Will Change After the End of Net Metering
Until now, owners of solar panels could benefit from the net metering system, under which excess electricity fed into the grid was credited on a one-to-one basis—each kilowatt-hour supplied could later be taken back when needed. This model made solar panel installations particularly attractive and encouraged widespread adoption of renewable energy.
With the shift to net billing, the rules change. Excess electricity generated will now be compensated at a wholesale rate, which is significantly lower than the retail price. At the same time, electricity consumed from the grid will be charged at the standard retail rate. This means that solar system owners will receive lower financial returns from selling surplus energy, while being incentivized to maximize self-consumption and install battery storage systems.
Why the Authorities Introduced These Changes
The main reason for the transition is congestion in the electricity grid. The mass installation of photovoltaic systems has led to excess electricity generation, especially during daytime hours. According to energy authorities, in early 2025 alone around 145 gigawatt-hours of solar energy could not be absorbed by the grid and were effectively lost.
The introduction of net billing is intended to reduce pressure on the system and encourage the development of home energy storage. Instead of exporting surplus electricity to the grid, owners will store energy and use it during evening hours, helping to reduce peak demand.
Subsidies and New Support Conditions
The state subsidy program for solar panels is also coming to an end. As of December 31 this year, direct subsidies for installing solar systems will cease. However, the authorities have introduced compensatory measures: under the new net billing model, homeowners will be able to receive support for installing battery storage systems.
From January 1, 2026, all new solar installations will be automatically connected exclusively under the net billing system. Those who are already operating under net metering will retain their existing terms until their current contracts expire.
How Many Homes Already Use Solar Energy
At present, around 4,000 applications for solar panel connections are under review. The Cyprus Electricity Authority has stated that it will aim to process them as quickly as possible.
Currently, approximately 81,000 photovoltaic systems are installed nationwide, representing about 16% of all residential properties. However, the actual share is likely lower, as the data are based on the 2021 census and the housing stock has grown since then.
What This Means for Property Owners
The transition to the new system changes the economics of solar energy but does not reduce its relevance. Investments in solar panels remain worthwhile, especially when combined with battery storage and efficient energy management. Amid rising tariffs and energy market instability, energy independence is becoming an increasingly valuable advantage.
For those planning to install solar panels under the old conditions, time is running out. After December 31, all new applications will automatically fall under the net billing system, making the current period decisive for many homeowners in Cyprus.
The move to the new model reflects the country’s broader strategy to modernize its energy system and adapt to actual renewable energy production levels, while maintaining a balance between grid stability and consumer interests.