The operation of residential photovoltaic (PV) systems in Cyprus is entering a new era. The transition from "net metering" to "net billing", the cuts in the production of renewable energy sources (RES), the increasing importance of storage systems, the changes in sponsorship schemes and the operation of the competitive electricity market (RES) are creating an unprecedented environment for thousands of households.
These developments directly affect the economic performance of existing and new investments in residential PVs, while raising new questions about how to utilize the energy produced.
Based on publicly available data and information from the competent bodies of the electricity sector, the article presents the main changes and answers the most frequent questions of household consumers.
From "net metering" to "net billing"
For several years, the "net metering" regime has been the basic operating model of residential photovoltaic (PV) systems in Cyprus. According to data that have been made public, about 100,000 households have residential PVs, which operate under a "net metering" regime. Their total installed capacity approaches 450 MW, accounting for approximately 43% of the total installed PV capacity in the country.
As of 1 January 2026, new residential PV installations are no longer included in the "net metering" regime, but in the "net billing" regime. This change differentiates the way the energy produced is utilized and makes it necessary for those planning to invest in a residential PV system to carefully evaluate the new data.
What's the difference;
The main difference between the two regimes is how exported and imported electricity from the grid are offset.
In "net metering", the offsetting is carried out every two months with quantities of electricity. The energy exported is offset against the energy imported from the grid. Any surpluses are carried forward to the next accounting period, while the deficits are charged at the retail price. Stored surpluses are reset to zero without compensation, according to the terms of the contract (usually every three years).
In "net billing", the offsetting is carried out every two months on a monetary basis. The energy exported to the grid is compensated at a wholesale price (e.g. 11 cents/kWh), while the energy imported from the grid is charged at a retail price, i.e. the owner of the residential PV "sells cheaply and buys expensively". This means that maximizing self-consumption in the periods it produces becomes more economically important for home PV owners.
The Role of Storage Systems
Batteries help increase self-consumption by allowing the excess energy generated by the PV system to be stored and used when there is no production. Their importance is reinforced in the 'net billing' regime, where the economic value of self-consumption is greater. However, the decision to install them depends on costs and technological developments in the storage sector.
The existing contracts with "net metering"?
Existing contracts with "net metering" will remain in force until their expiry (usually 15 years) and are not directly affected by the changes applied for new installations.
After the end of the contract, the system owner can switch to net billing or consider other available options to be offered under the AAH.
The zeroing of stored surpluses?
Usually, "net metering" contracts provide for zero stored surpluses after one or three years, depending on the terms of the contract.
Some older contracts even provide for compensation. At the beginning of 2026, EAC Prometheia decided, on the basis of the 2024 RES grant scheme, to zero the stored surpluses, without compensation.
At the same time, it decided that the zeroing of surpluses is repeated every three years without compensation for all contracts. The issue caused strong reactions from owners of residential PV systems, there was a involvement of the Parliament and the referral of the President and now it is in the Council of Ministers for a final decision.
There are new support plans;
The change in state policy is strongly reflected in the sponsorship plans. The highly popular "Photovoltaics for All" project has ended on 31/12/2025. There is currently no sponsorship plan in progress.
However, in September 2026, the new "Upgrade – Exoikonomo" grant scheme is expected, amounting to €20 million. This program will focus on the energy upgrade of homes. An important element of the plan is that through it, the installation of PV with storage can also be subsidized. This direction aligns with the European "Energy Saving First" policy, which prioritizes reducing consumption before generating electricity.
Residential PV and Competitive Market
An important development is the possibility for residential PV owners to participate in the EEW. According to the existing regulatory framework (CERA Regulatory Decision 02/2024), owners of residential PVs - who do not participate in sponsorship schemes - can exploit their surplus production through agreements with electricity suppliers or with cumulative representation bodies active in RNG.
This development creates new possibilities, but also a greater need for residential PV owners to understand the economic and technical parameters.
Why are cuts being made?;
One of the most frequently asked questions concerns cuts in renewable energy production. Every electrical system must maintain a continuous balance between electricity production and demand.
During periods where PV production is particularly high and consumption is low, PV overgeneration conditions may occur that affect the stability and safety of the electrical system. In such cases, the Cyprus Transmission System Operator may give instructions to the Distribution System Operator/EAC to limit PV generation.
These decisions are made on the basis of specific criteria. First the large PV parks are cut and then, if necessary, the newer residential PVs. Older residential PVs, which make up about half of household PVs, have been connected without a "ripple control" mechanism and are not trudged.
Can cutbacks be avoided? – Off-grid operation
One of the options available to avoid cutbacks is to operate the residential PV in a "zero export" mode on a temporary or permanent basis.
In this case, the energy produced is consumed within the dwelling and is not fed into the grid, unless there is a possibility (temporary basis). However, the actual cost-effectiveness depends on a number of factors, including the user's consumption profile, the size of the PV system, and whether or not there is a storage system.
Complete disconnection from the grid is possible, subject to the approval of the competent authorities, for isolated areas, where there is difficulty in supplying electricity. For the installation, a study by a qualified electrical engineer is required and combines PV with batteries. For backup coverage, an oil generator is needed.
Owners wishing to expand or modify their PV system must obtain the necessary approvals from EAC Supply. Depending on the extent of the changes, a revision of the existing contract or the installation of equipment to limit cuts ('ripple control') may be required.
* Electrical engineer, with many years of experience in the operation of the Electrical System
