The 4th International Eilat-Eilot Renewable Energy Conference and Exhibition will open tomorrow. Besides the exhibition where innovative technologies seeking business opportunities will be presented, Israel's largest conference in its field will, this year, be held under a question mark about the country's solar energy industry, after a controversial decision by the ministerial committee for renewable energy.
Prime Minister Benjamin Netanyahu set up the ministerial committee for renewable energy a year ago. It did not hold its first meeting until a week ago, and on the agenda was the issue of the electricity generation quotas set in early 2009 for wind, solar, and biomass facilities. The 2009 decision sets a quota of 500 megawatts for these systems, but also hedges by saying that even if the quota is not fulfilled, the minister of finance has the authority after two years to recalculate the incentives for electricity production by solar energy.
Belying the opinion of solar energy businessmen and Minister of National Infrastructures Uzi Landau, the ministerial committee for renewable energy decided to freeze the quota for large solar farms until the costs of the arrangement to the economy are recalculated.
An angry Landau said that the decision was a "targeted assassination of solar energy in Israel." Solar energy companies are competing to put the worst construction on the freeze. A senior industry executive, who preferred to remain anonymous, told "Globes", "The whole world is coming to the Eilat-Eilot Conference just to hear that everything in Israel is stuck. It's infuriating, but mostly it's sad, because other countries are setting more ambitious targets for the generation of green electricity than the targets set here."
Another executive said, "For the companies, the meaning is clear: a complete halt in the development of a business that will result in driving activity abroad to seek investors, and, most of all, will lead to the firing of employees." He added, "3,000 Israelis are currently employed in the business, mostly in the periphery. They install systems at moshavim and kibbutzim. So far, no company has fired employees, in the belief that the directive will be cancelled, but the current situation appears bad.
An analysis of the size of Israel's solar energy business shows why some large companies are casting their eyes to other markets. One of these companies is SBY Solutions Ltd. (Solar By Yourself), which markets solar energy systems. Its path to the heart of the Italian market is via the language; it is sending employees to learn Italian as part of its strategy to set up shop there.
SBY commercial operations manager Meiri Almaslinos told "Globes" that the small size of the Israeli market was not the only reason for focusing on Italy. "As of early 2011, only 60 megawatts of solar energy systems have been installed in Israel, and now there is a dispute over the size of quotas for the coming years. In 2010, Italy set a quota of 1,500 megawatts, and these figures tell us to focus there," he said.
SBY's strategic decision reflects the frustration of many leading companies in Israel's solar energy market. The appetite is there, along with rising demand for the installation of systems. The technology is available and reliable, but regulators are hesitant, and the lack of a clear and consistent policy for quotas and rates is driving companies to foreign fields in countries that appreciate solar energy ventures.
Published by Globes [online], Israel business news - www.globes-online.com - on February 21, 2011
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