Energy minister rejects claims that solar systems are loss-making

Nicosia, Cyprus. Energy Minister Michalis Damianos has rejected assertions that photovoltaic systems are loss-making, saying such claims discourage investment in clean energy.

He made the comments in a letter released on Monday in response to questions submitted by Akel MP Christos Christofides.

Solar energy curtailments

Christofides raised questions about cuts to solar generation when supply exceeds demand, noting that surplus energy is lost in the absence of storage systems.

Approximately 300 gigawatt-hours of solar energy was curtailed in 2025 because of grid constraints and insufficient battery storage, accounting for nearly half of distributed renewable generation. In the first five months of 2026, Cyprus curtailed 162 gigawatt-hours.

Damianos said the Transmission System Operator and Distribution System Operator are responsible for curtailments. He said the reductions are necessary to maintain grid stability when renewable output exceeds demand or the grid’s technical limits.

The measures are not intended to discriminate against any category of producer or consumer, he added.

Order of reductions

Under current practice, curtailments are initially imposed on large commercial solar systems, including solar farms, and large own-consumption installations that can gradually reduce output.

If further reductions are needed, smaller systems, including rooftop solar installations, are also curtailed.

Damianos said claims that photovoltaic systems are loss-making create unwarranted uncertainty among consumers, deter investment in clean energy and negatively affect businesses in the renewable energy sector.

Net billing system

The minister also addressed the move from net metering to net billing, saying the change was necessary to ensure compensation for surplus electricity reflects real market conditions.

He said the measure also aims to prevent consumers without solar installations from bearing a disproportionate share of higher grid costs associated with net metering.

Damianos said the net billing regime currently used by the Electricity Authority of Cyprus first applies net metering during the billing period and then net billing. As most household consumers are served by the EAC, he said their financial benefit does not differ materially from the previous regime.