Solar credit reset backlash gathers pace

Uproar from solar panel owners in Cyprus is intensifying after thousands of households saw accumulated electricity credits wiped from their accounts.

The controversy which has been growing in pace since the Cyprus Mail first reported on it on March 8, centres on the clearing of surplus photovoltaic energy credits held under net-metering arrangements.

This means that electricity bills issued in February showed balances built up over months or years had been reduced to zero, with no prior warning issued to customers.

The development has triggered complaints, a petition campaign and calls for greater transparency from the electricity authority (EAC).

At the same time, households are facing a second pressure from widespread curtailments, with solar systems remotely disconnected from the grid during periods of oversupply.

Consumers are now losing both previously stored energy credits and the ability to generate new ones, just as electricity prices rise due to increased reliance on oil-fired generation linked to the ongoing war in the Middle East.

“We signed a 15-year agreement that says surplus electricity is carried forward,” one solar user told the Cyprus Mail. “Now we are told the credits are gone.”

The EAC has confirmed the reset is part of policy changes approved in 2023 under the government’s renewable energy framework.

In a written response, the authority affirmed that “the deletion of surplus energy credits has begun” and that “the next clearing of surpluses will take place in February to March 2026 and will be implemented every three years thereafter”.

Under the amended rules, households operating under net metering can carry forward surplus energy for a maximum of 36 months, after which any unused credits are automatically cancelled.

The authority maintains it is acting “within the framework set by the energy ministry and in accordance with all applicable regulations”.

However, the way the policy has been applied is at the heart of the dispute.

Customers argue that agreements which for years allowed credits to roll forward indefinitely gave no indication of a fixed expiry.

More significantly, many say they received no advance notice that February 2026 would mark the first clearing cycle.

“We were not aware that credits would be zeroed every three years,” one household said.

“We are paying for the system and for the storage of excess electricity, and that opportunity is being lost to us.”

The amended plan refers to surplus energy being cleared in “the last bill of the 36 months”, which some customers argue implies an individual timeline based on when each system became operational.

Instead, the authority applied a single clearing date to all systems, regardless of installation date.

Energy analysts say the dispute is less regarding the legality of the move but rather its implementation.

Nicholas Christofides, associate professor of electrical engineering at Frederick University, said the framework itself allows for such changes but raised concerns about how they were introduced.

“It is not a question of legality, as the contracts allow for amendments,” he confirmed.

“But informing customers responsibly is a separate matter, and that is where concerns arise.”

He added that current grid conditions have amplified the impact.

“Curtailment alone is not enough to mitigate the situation. A significant amount of energy is still lost,” he said.

Given these conditions, Christofides suggested flexibility could have been considered.

“Under the present circumstances, it would be within reason for the authority to consider a grace period.”

The EAC, however, indicated such a move is beyond its remit.

“Our responsibility is to implement the policy as set,” a spokesperson said, adding that any grace period would require direction from the energy ministry.

“Since the first phase of the scheme in 2013, credits would expire annually,” they insisted.

“The ministry later extended this to allow households to use stored energy over the winter period.”

The Cyprus Mail invited the energy ministry to comment yet has received no response.

The backlash has been intensified by a surge in curtailments, as the electricity system struggles to balance supply and demand amid rapid solar expansion.

According to official data, renewable output has recently exceeded 1,000 megawatts, while demand has remained around 450 megawatts.

This imbalance has forced operators to limit solar generation to maintain grid stability.

In a recent statement, the authority said “at any given moment, total electricity generation must equal total demand”, warning that any imbalance risks system collapse.

Curtailment orders are issued by the transmission system operator and increasingly affect residential systems.

Owners across multiple regions reported temporary disconnections in recent days.

One resident said they had been disconnected “four out of the last five days”, adding that “at the same time, 7,000 credits I accumulated have been wiped.”

Correspondence between the energy regulatory authority (Cera) and a consumer helps clarify the legal and technical basis for these curtailments.

In a letter dated March 18, 2026, Cera stated that under electricity market regulation laws, system operators are responsible for maintaining a “secure, reliable, economic and efficient electricity system”.

During periods of low demand, particularly in mild weather, the regulator confirmed that renewable generation may be limited to protect grid stability.

Operators have the right to reduce electricity fed into the system “without limitation and at any time” if required for safe operation, including preventing overloads or even a total system shutdown.

The regulator also highlighted that Cyprus’ heavy reliance on variable renewable energy, particularly photovoltaics, requires conventional generation to adjust continuously to maintain balance.

Importantly, Cera insisted that full shutdowns of residential systems should be a last resort.

Where technically possible, households can request “zero injection” capability, allowing them to use their solar generation internally without exporting it to the grid through this requires additional equipment at the consumer’s expense.

Cyprus has one of the highest rates of photovoltaic adoption in Europe relative to system size, but lacks the infrastructure needed to manage excess generation.

Large-scale battery storage remains limited, and the grid is not yet interconnected with neighbouring countries, eliminating the option of exporting surplus electricity.

As a result, curtailments are expected to increase as more photovoltaic systems come online.

The combination of credit resets and curtailments is particularly significant during the transition from winter to spring, when stored credits are typically used to offset lower production.

Households are now losing both past and future benefits.

Policy changes introduced this year reflect an attempt to address these challenges.

Since January, new solar installations have been placed under a net billing system rather than net metering.

Under this model, exported electricity is compensated at wholesale rates rather than offset against retail consumption, reducing the incentive to generate surplus energy.

Officials say this is intended to encourage self-consumption and investment in battery storage, with subsidy schemes being expanded to support uptake.

Existing net-metering customers have retained their contracts, but the 36-month cap represents a significant shift in how those agreements function in practice.

For many households, this alters the financial assumptions on which their investments were based.

At the same time, electricity prices are rising due to higher costs for oil-based generation.

Cyprus continues to rely heavily on conventional power stations, particularly when renewable output must be curtailed.

Recent developments in the Middle East have pushed fuel prices higher, feeding through to consumer bills.

Critics argue households are being penalised despite contributing to the transition.

“We invested in solar to reduce reliance on oil-fired electricity,” one customer wrote. “Now we are paying more, not less.”

Consumer groups are expected to raise the issue with regulators, while political pressure may increase as the financial impact becomes clearer in upcoming billing cycles.

The EAC has defended its position, reiterating that it is simply implementing government policy, but has not directly addressed concerns over customer communication ahead of the reset.

For many affected households, the issue goes beyond a single policy change.

As one customer remarked, “the issue is not just the credits. It is the combination of everything happening at once.”