Why Cyprus is Throwing Away Solar Energy, and How We Can Fix It
Washed in Sunshine
I was sitting at home on a bright, cloudless day in sunny Cyprus reading a news article about how solar photovoltaic (PV) panel systems across the island (like the one I have at home, a modest 5 kWp setup) instead of sending any excess power back to the grid, the Electricity Authority of Cyprus (EAC) had decided to curtail my solar generation.
Curtailment. That’s the word they use when the grid can’t handle the excess energy being produced, and instead of storing it for later use, they simply shut it off. No warning, no compensation. Just wasted sunshine. It’s a frustrating irony—living in one of the sunniest places in Europe, and yet being told there’s ‘too much solar power’ for the grid to handle.
And what does this mean for my net metering bill? Well, it means that even though my solar panels could be producing more energy, feeding it into the grid, and offsetting my monthly electricity costs, the grid operator is forcing them to shut down. So instead of banking those extra kilowatt-hours for later use, I end up buying more electricity from the EAC—which, of course, still relies heavily on fossil fuels. It’s a double hit: I lose the free energy my system could generate, and I have to pay for dirtier, more expensive power instead. The whole point of installing solar panels was to cut my reliance on the grid, reduce my bills, and help the environment, but with curtailment, I’m stuck playing by rules that favour the grid over the consumer.
This frustration led me down a research rabbit hole, trying to understand why this was happening in 2025 (10+ years after the first PV net-metering technology is in place on the island). I dived into reports from the EAC, distribution system operators, and news articles, hoping to make sense of it all. What I found was both fascinating and deeply flawed: the grid infrastructure in Cyprus is outdated, and that’s a big part of the problem. But I didn’t stop there. Scroll down and you’ll see some assumptions and calculations on the cost and benefit of energy storage. But first… some educational background. (References are listed at the end.)
The Grid We Have vs. The Grid We Need
The electricity grid in Cyprus was designed decades ago (1970s) to handle power from large, centralised fossil-fuel plants that generate electricity and push it one-way toward consumers. But with the rise of rooftop solar and commercial PV farms, the system is now expected to handle two-way flows of electricity—something it simply wasn’t built for.
Here’s what that means in practice:
Voltage Instability: When thousands of households inject solar energy into the grid at the same time, voltage levels can spike, leading to power quality issues and potential damage to infrastructure.
Lack of Storage: Unlike other countries with hydroelectric dams or large battery storage facilities, Cyprus has nowhere to store excess solar energy during peak hours.
Grid Congestion: In some areas, distribution lines can’t handle the extra electricity being pushed into them, forcing operators to curtail solar production.
Isolated Energy System: Cyprus isn’t connected to any other national grid, meaning all energy produced must be used locally, or wasted.
To solve these issues, the government and energy authorities are focusing on large-scale projects, particularly interconnections with Europe, Africa, and Asia, but are also pressed by the local consumers and PV-installation professional bodies like SEAPEK to introduce legislation for battery storage alongside private and commercial renewable generation plants.
The Mega Projects: Interconnections & Grid Modernization
One of the biggest infrastructure projects underway is the EuroAsia Interconnector, a massive underwater electricity cable that will connect Cyprus to Greece and Israel. The goal? To allow excess energy to be exported and balance out supply and demand across multiple countries. A similar project, the EuroAfrica Interconnector, aims to connect Cyprus to Egypt.
Alongside these interconnectors, the government is also investing in grid modernization—upgrading transmission lines, building smart substations, and improving real-time energy management systems. These investments are crucial for handling more renewable energy, but they are also slow, expensive, and politically complicated.
Here’s the problem: large-scale public-private energy projects in Cyprus don’t exactly have a great track record. Just look at the ongoing natural gas disaster—what was supposed to be a game-changer for the island’s energy independence has turned into a bureaucratic and financial nightmare. The government poured hundreds of millions into an LNG import terminal at Vasilikos, only to face massive delays, contract disputes, and legal battles. A Chinese contractor is now demanding €200 million in compensation after the contract was terminated, and Cyprus remains as reliant as ever on expensive, polluting oil imports. It’s the same old story: big promises, big investments, and big failures that leave taxpayers footing the bill. So when we hear about billion-euro energy interconnectors and state-funded infrastructure upgrades, should we really trust that these projects will go smoothly and be delivered on time? Or will they end up as just another cautionary tale in Cyprus’ long history of ambitious but undelivered energy plans?
And this brings me back to my original frustration: why are we focusing on billion-euro mega projects, when the simplest and fastest solution is already available?
The Case for Household Battery Storage
Instead of shutting down solar panels in the middle of the day, what if every household with a PV system could simply stored its own excess energy? This is common practice in many EU countries (usually under a net-billing model). Adding a battery storage system to homes would allow people to charge their batteries when the sun is shining and use that energy at night, reducing demand on the grid and eliminating curtailment altogether.
This approach has clear benefits:
No Wasted Solar Power – Instead of curtailment, energy is stored and used later.
Reduced Fossil Fuel Dependency – Less need to fire up oil and gas plants at night.
Faster Implementation – Households can install batteries today, rather than waiting years for grid upgrades.
Energy Independence – Each household becomes its own mini power station, reducing strain on national infrastructure.
More Jobs for Local Installers and Technicians – Battery installations require skilled labor, boosting employment for electricians, solar technicians, and energy consultants.
Reduced Energy Imports and Fines – Cyprus currently spends hundreds of millions of euros importing fossil fuels and then paying up to €570 million in “emission” fines. Every kilowatt-hour stored in a home battery reduces reliance on expensive foreign energy sources, keeping that money circulating within the country.
Support for Small Businesses – With more stable and predictable electricity, small businesses, farms, and commercial operations can cut their energy costs and become more competitive, fostering economic resilience.
Encouraging Innovation – A shift toward decentralized energy solutions creates opportunities for Cypriot startups and universities to develop new technologies in battery storage, smart grids, and energy efficiency.
Of course, there are challenges. Home batteries aren’t cheap, and current net metering policies don’t incentivize storage as much as they should. There’s also the question of who benefits from the status quo—energy companies and infrastructure contractors make billions from government-backed projects, whereas decentralized energy solutions put power (literally) in the hands of individuals.
So the big question remains: Should we wait years and spend billions on interconnectors and grid upgrades, or should we empower individuals to solve the problem right now with local storage?
Get ready for SOME CALCULATIONS
Cost Estimates & Financial Risks of the Mega Projects
Here’s a simplified estimate of what Cyprus is spending on its large-scale energy transformation projects, along with their expected delivery dates:
Total cost: Conservatively €3.7 billion (could be more due to delays, contract disputes, and infrastructure challenges).
Biggest cost driver: The interconnectors are by far the most expensive components. While they do improve grid resilience, they won’t directly help consumers cut electricity bills or solve the short-term problem of solar curtailment.
The Hidden Costs of Delay
These projects are years away from being operational, leaving Cyprus locked into high fossil fuel costs, emission fines, and wasted renewable energy until at least 2030.
Emission fines until 2030: Cyprus consumers have already paid €570 million in EU carbon fines (2017-2022) due to fossil fuel reliance. If this continues, the country will pay another €570 million in fines from 2025-2030, before these projects even come online.
Lost renewable energy: Every year, 140 GWh of solar power is curtailed—enough to power 28,000 households. By 2030, that’s ~840 GWh of wasted clean energy that could have been used or stored, and will instead be paid by the prosumer (a consumer that also produces PV solar electricity) to the EAC. That’s an additional €252 million of EAC income.
Even if these projects do eventually lower costs, the financial and environmental damage in the meantime is substantial.
So, is there a better way?
Cost Estimates & Financial Benefits of PV+Battery Installations
As of December 2023, approximately 10% of Cypriot households have installed PV systems on their rooftops. This translates to around 52,883 connected systems, primarily under net metering arrangements.
Upgrading Existing PV Systems with Battery Storage
To enhance energy independence and reduce grid reliance, (most) existing PV systems can be easily retrofitted with battery storage. My inverter at home is already “battery ready by direct Plug & Play, no extra device or any retrofit required” according to the manufacturer.
Estimated Cost per Battery System: €5,000 (for a 5 kWh capacity) + €1,000 for installation
Total Investment Required: €317.3 million
Time Required for the upgrade: 1-2 years
Expanding PV and Battery Systems to 50% Households
To further reduce fossil fuel dependence, consider the following scenarios:
Total Households in Cyprus: Approximately 530,000
Households Needing New PV + Battery Systems: 212,00 (40% of 530k)
Estimated Cost per PV + Battery System: €12,500 (for a 5 kWp PV system and 5 kWh battery)
Total Investment Required: €2.65 billion
Time Required for the upgrade: 5 years
The Hidden Benefit of Acting Now
Just as we calculated the hidden cost of delay for mega projects (emission fines, wasted energy), there’s an enormous hidden benefit to acting immediately with household PV + battery adoption:
€570 million saved by reducing emission fines
€252 million in renewable energy preserved instead of wasted through curtailment
€888 million injected into the local economy, creating thousands of jobs in solar installation & battery deployment
More energy independence and resilience against future electricity price volatility
A total of €1.7 billion in hidden or saved benefits.
Return on Investment (ROI) for 50% Household PV + Battery Adoption
With an initial investment of €2.65 billion, the total estimated annual savings from emission fines avoided, prevented curtailment, and additional electricity generation is €678 million per year.
This means the payback period for the investment would be approximately 3.9 years.
The biggest losers from such a transaction would be the EAC, which would sell significantly less electricity, the mega project contractors who rely on billion-euro government deals, and oil companies that profit from Cyprus' fossil fuel imports. Additionally, financial institutions backing large-scale infrastructure projects might lose lucrative lending opportunities, and grid operators tied to centralised energy distribution could see diminished control over the market.
Meanwhile the biggest winners of such a policy change are clearly the Cypriot prosumers and businesses.
Hmmmmmmmmm 🤔
Breakdown of Annual Savings:
€95 million saved by avoiding emission fines
€42 million saved by utilizing solar energy that would otherwise be curtailed
€541.6 million from additional electricity generation (212,000 PV systems producing ~8,500 kWh annually at €0.30/kWh)
Conclusion
With a payback period of just under 4 years, this investment in household PV + battery adoption is far faster, less risky, and more financially viable than waiting for mega projects to be completed in 2028-2030. Beyond year 4, the country would start profiting significantly—reducing costs for consumers, improving energy independence, and strengthening the local economy.
Limitations of my Analysis: Salt and Pepper
This has been a very simplified, back-of-the-envelope calculation, meant to extinguish my own curiosity and explore the financial and practical feasibility of household PV + battery adoption versus large-scale infrastructure projects and I hope you found it both interesting and informative. Of course, there are many factors and uncertainties that I haven’t accounted for, such as:
Battery degradation & replacement costs – Over time, batteries lose efficiency and may need replacement after 10-15 years.
Financing & subsidies – Government incentives, loan programs, or financing schemes could drastically affect payback periods.
Grid fees & policy changes – Future changes to net metering or net billing policies could influence the economics of household energy storage.
Variability in solar generation – Weather conditions and seasonal variations impact real-world PV output.
Installation logistics – Scaling up to 50% household adoption would require substantial workforce training and supply chain readiness.
Also, I’m not an expert in energy economics, but as someone with a PhD in physics and over 10 years of experience in research, technology, and innovation, I do have a background in data-driven decision-making. I’ve also completed relevant training in battery storage systems from the University of Cyprus, which provided a solid technical foundation for understanding these solutions.
Since this is a blog, I’d be super happy to hear from readers—especially if you have corrections, deeper insights, or alternative perspectives. If you work in energy, policy, or infrastructure and think I missed something important, I’d genuinely appreciate your feedback. Let’s continue the conversation!
Photo Credit: Yiorgos Stavrinos https://www.flickr.com/people/ssj_george/
References:
Curtailment & Net Metering in Cyprus
Electricity Authority of Cyprus (EAC) – Official site detailing Cyprus' electricity production, distribution, and net metering policies.
EAC Electricity ProductionNet Metering Introduction in Cyprus (2012) – Early reports and documents outlining Cyprus’ transition to net metering.
Wikipedia: Energy in CyprusCurtailment Issues & Grid Limitations – Recent articles highlighting curtailment of excess solar energy due to grid instability.
Knews: Cypriots Losing Confidence in Solar Energy Amid Frequent ShutdownsThe magnitude of the curtailment problem in Cyprus - In 2024, 29% of green electricity was curtailed. This is equivalent of the total annual consumption of approximately 28,000 households.
Cyprus Grid Limitations & Outdated Infrastructure
History of Cyprus' Electricity Grid – Timeline of energy-related events in Cyprus, including outdated infrastructure and its inability to handle modern renewable energy flows.
ResearchGate: Cyprus Energy TimelineOne-Way vs. Two-Way Power Flow – Explanation of how traditional grids were designed for unidirectional power flow but now face challenges with bidirectional power injection from solar PV systems.
LinkedIn: Bidirectional Power Flow Risks in Modern Grids
Large-Scale Energy Projects (Interconnectors & LNG Terminal)
EuroAsia Interconnector – €1.9 billion high-voltage subsea cable project connecting Cyprus to Greece & Israel.
Reuters: Cyprus Signs MoU for EuroAsia InterconnectorEuroAfrica Interconnector – Another interconnection project linking Cyprus to Egypt.
Wikipedia: EuroAfrica InterconnectorLNG Import Terminal Failure – Cyprus’ Vasilikos LNG terminal project, now plagued by massive delays and legal disputes.
In-Cyprus: Chinese Company Demanding €200 Million from Cyprus Over LNG Contract
Battery Storage & Net Metering in Other Countries
Germany Italy and Austria leading the way in Solar + Battery Models
European Market Outlook on Residential Battery Storage Report
Greece’s Net Billing & Battery Policies – Greece recently shifted from net metering to net billing and is incentivizing battery storage.
Greek Government’s Renewable Energy Storage Policies and Subsidies
Economic & Job Growth Benefits of Household Storage
Energy Storage Jobs & Economic Growth – Reports on how decentralized solar + battery installations create more local jobs than large infrastructure projects.
IEA: Energy Storage & Employment GrowthCyprus’ Energy Storage Subsidy Plan – Government-backed plans to support battery adoption in residential & commercial solar projects.
Energy Storage News: Cyprus’ 150MW/350MWh Energy Storage Support Scheme
Emission Fines in Cyprus
Consumers paid €570 mln in EAC emission fines - This article reports that between 2017 and October 2022, consumers bore €570 million in costs due to the EAC’s reliance on fossil fuels, leading to significant emission fines under the EU Emissions Trading System.