Expanding solar energy production on residential buildings

Only three percent of electricity generation using photovoltaic (PV) technology in Israel comes from residential rooftops facilities. However, local electricity generation near sources of electricity consumption carries many benefits such as preventing encroachment onto nature reserves, reducing transmission costs, as well as decentralization and redundancy of the network. These benefits are not taken into account in the production costs and therefore, even though the prices of PV modules continue to drop consistently and despite Israel’s high solar radiation, most of the electricity is produced in ground-based facilities.

The research examines the barriers preventing the expansion of solar energy production on residential buildings in Israel. The analysis found that the  “net-metering” regulation for domestic consumers allows for the establishment of PV facilities only for personal use. This restriction prevents the possibility of dividing benefits among tenants or implementing other solutions which require the option of balancing between different electricity bills. Moreover, the fact that the roof of the building is owned by multiple owners makes it difficult to coordinate and reach consensus needed for implement the project.

In light of these problems, five different models for erecting a solar PV system on a multi-family residential building were examined:

  • The tenants association (Va’ad Bait) model, where the tenants initiate the solar project for reducing costs of common uses;
  • The public housing model, in which the systems are installed on public housing properties and the benefits are used for the maintenance of the buildings;
  • The local authority model, in which the local authority initiates the construction of facilities on privet buildings in its territory;
  • The partnership model, which describes an establishment of a corporation by the tenants who pays for the private electricity bills and charges the tenants for a reduced fee;
  • The shared economy model, which allows tenants who are unable to install a system on their roof to purchase solar rights from other tenants that own a solar system on other roofs.

The external benefits of local and decentralized power generation justify the government to act to shift the solar market towards rooftop facilities. In addition, the research indicates effective tools held by the government to increase demand, remove uncertainty and create proof of concept. This can be done through economic incentives, improving and adjusting regulation, and by initiating projects on public buildings.

Following Nir’s research, the Ministry of Environmental Protection has produced this short film.

Nir Lotan
Nir interned at the Ministry of Environmental Protection. Prior to joining to Milken Fellows Program, Lotan worked in the Ministry of Environmental Protection and was responsible for the economic analyses related to green building programs. His responsibilities included writing policy papers, conducting cost-benefit...
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