Cyprus energy minister dispels 'loss-making' claims, urges continued solar investment
"Energy Minister Michalis Damianos rejected claims that solar PV systems are loss-making, clarifying that recent power curtailments are strictly technical grid-stability measures rather than economic failures. He emphasized that properly sized installations and the net billing regime continue to deliver significant consumer savings, supported by upcoming business energy storage grants."
EU Directive 2019/790 Article 15 Attribution • Verified Energy Document
Minister Michalis Damianos on Monday strongly refuted claims that photovoltaic (PV) solar systems are "loss-making," asserting such misinformation actively discourages crucial investment in clean energy. His comments were made in a public letter responding to an inquiry from Akel MP Christos Christofides, who questioned the policy of curtailing solar power output when supply outstrips demand and storage capacity.
The minister highlighted a significant issue: a substantial amount of solar energy is currently wasted due to grid limitations and the absence of adequate battery storage. In 2025, approximately 300 gigawatt-hours (GWh) of solar energy were curtailed, representing nearly half of the island's distributed renewable generation. This trend has continued into 2026, with 162 GWh already curtailed in the first five months alone.
Damianos clarified that curtailments are implemented by the Transmission System Operator (TSO) and the Distribution System Operator (DSO) solely to maintain grid stability. These measures are enacted when renewable energy production surpasses demand or exceeds the technical capacity of the grid, ensuring there is no discrimination against specific producers or consumers. Typically, larger commercial solar farms and large own-consumption systems are the first to experience production cutbacks, as they can more easily scale down operations, with smaller rooftop installations affected only if absolutely necessary.
"The dissemination of inaccurate claims, such as that photovoltaic systems are loss-making, creates unwarranted insecurity among consumers, discourages new investments in clean energy, and adversely impacts businesses engaged in the renewables sector," Damianos stressed.
Addressing the shift from net metering to net billing, the minister explained this change was essential for two reasons: to ensure compensation for surplus electricity reflects genuine market conditions, and to prevent non-solar consumers from bearing a disproportionate share of increased grid costs associated with net metering. He noted that the current net billing regime, as applied by the Electricity Authority of Cyprus (EAC), still incorporates net metering within the billing period, meaning the financial benefit for most household consumers remains "not materially different from the previous regime."
Furthermore, Damianos pointed out that even with constraints on energy export, such as installing a zero-export device (which prevents excess solar energy from being sent to the grid), correctly sizing a PV system to a household’s consumption profile can still lead to significant energy cost savings.
Looking ahead, the minister indicated that with the competitive electricity market officially launched in October 2025, electricity suppliers are now free to develop commercial products offering more favourable mechanisms for utilising generated energy, including "netting schemes other than the basic net billing," provided they adhere to regulatory frameworks.
Regarding large commercial solar parks, Damianos confirmed they operate within the competitive market through either bilateral contracts with suppliers (forward market) or direct agreements with the TSO (day-ahead market). He reiterated that the specifics of these bilateral contracts are private and confidential, hence unknown to the ministry.
In a concluding announcement, the minister revealed that the government would soon unveil a new grants scheme designed to support energy storage solutions for businesses.