{"id":142296,"date":"2026-06-11T09:33:34","date_gmt":"2026-06-11T09:33:34","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=142296"},"modified":"2026-06-11T11:48:32","modified_gmt":"2026-06-11T11:48:32","slug":"cyprus-renewable-energy","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/cyprus-renewable-energy\/","title":{"rendered":"Cyprus: Renewable Energy"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-142296","comparative_guide","type-comparative_guide","status-publish","hentry","guides-renewable-energy","jurisdictions-cyprus"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Akis Papakyriacou LLC<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2021\/10\/logo-1.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Akis Papakyriacou LLC<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2021\/10\/logo-1.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Renewable Energy laws and regulations applicable in Cyprus<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have an established renewable energy industry? What are the main types and sizes of current and planned renewable energy projects? What are the current production levels? What is the generation mix (conventional vs renewables) in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Cyprus has made remarkable strides in recent years to foster the production and utilization of renewable energy. This shift to renewable energy aligns with the obligations that Cyprus has pursuant to the objectives outlined in relevant Directive (EU) 2018\/2001 on the Promotion of the Use of Energy from Renewable Sources. The nation&#8217;s unwavering commitment to meet the European Union&#8217;s mandated national targets has been pivotal in driving these endeavours.<\/p>\n<p>The renewable energy landscape in Cyprus currently boasts a diverse array of technologies, prominently including solar photovoltaic systems, wind turbines, biomass, and solar thermal systems. Solar photovoltaic systems and wind turbines emerge as the frontrunners, significantly contributing to the country&#8217;s national power grid. Cyprus currently hosts several operational wind parks and solar parks, with a substantial number of projects under construction or undergoing licensing.<\/p>\n<p>In general, Cyprus aims to strengthen its position as an emerging regional energy hub in the Eastern Mediterranean.<\/p>\n<p>Regarding numbers, based on the current available data, in 2024, the share of energy from Renewable Energy Sources (RES) in the gross final energy consumption of the Republic of Cyprus amounted to 20.84%, surpassing the indicative trajectory set in the previous National Energy and Climate Plan (NECP), which was 17.2% for 2024, as well as the baseline reference share of 13% as stipulated in Article 3(4) of Directive (EU) 2018\/2001. There was a 3.12% increase in the RES energy share in 2024 compared to 2023, which stood at 20.21%. Additionally, in 2024, the share of RES in the electricity generation sector amounted to 24.09%, in the heating and cooling sector it reached 42.30%, and in transportation it was 7.39%.<\/p>\n<p>Up to 31\/01\/2023 the total established power of RES in the energy sector has been calculated to 662.17MW.<\/p>\n<p>Pursuant to the Final Updated Integrated National Energy and Climate Plan of Cyprus covering the period 2021-2030 (which was submitted to the European Commission on 19 December 2024), the compulsory contribution of Cyprus to the EU\u2019s gross final energy consumption has now been set to 42.5% (from 23% which was the initial goal).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are your country's net zero\/carbon reduction targets? Are they law or an aspiration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to the Final Updated Integrated National Energy and Climate Plan of Cyprus covering the period 2021-2030 (which was submitted to the European Commission on 19 December 2024), the revised target regarding the reductions of the greenhouse gas emissions is by 32% up to 2030 compared to 2005 (from 24% which was the initial target). The said target has been set by the Regulation (EU) 2023\/857 amending Regulation (EU) 2018\/842 regarding the binding annual greenhouse gas emission reductions by Member States from 2021 to 2030, in the context of contributing to climate action for fulfilling commitments arising from the Paris Agreement, and Regulation (EU) 2018\/1999.<\/p>\n<p>The target is considered ambitious, particularly in light of Cyprus\u2019 isolated electricity system and continued dependence on conventional fuels. Nonetheless, the relevant authorities have proposed supplementary measures for achieving the set target, including , inter alia, green tax reform, Emissions trading system in buildings, additional emissions reductions from the implementation of measures to be included in the Common Agricultural Policy, design of nature-based solutions to increase CO2 absorption (e.g., promotion of green roofs, increase in private forests, increase in urban green public spaces, improvement of urban green spaces).<\/p>\n<p>It is worth noting that the country&#8217;s forestry department is implementing an afforestation programme, favouring non-invasive indigenous species that are already adapted to the country&#8217;s climatic conditions. The aim under this programme is to plant up to 300 000 trees a year up until 2030. These measures are expected to play an important role in the expected 86 % increase in carbon sink functions by 2040 compared with 2019 levels.<\/p>\n<p>As stated above, the above targets have been set by the National Energy and Climate Plan of Cyprus, the formation of which was a requirement pursuant to an EU Regulation, therefore, if Cyprus does not meet the goals set, then basically Cyprus shall have failed to uphold its obligations under an EU regulation and infringement proceedings may be initiated against Cyprus by the European Commission.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a legal definition of 'renewable energy' in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to Article 2 of the Law on the Promotion and Encouragement of the Use of Renewable Energy Sources of 2022 (L.107(I)\/2022), energy from renewable sources or renewable energy is defined as \u201cenergy from renewable non-fossil sources, namely wind, solar (solar thermal and solar photovoltaic), geothermal, ambient, tidal, wave and other forms of ocean energy, hydropower, biomass energy, energy from landfill gas emissions and energy from gases produced in waste water treatment plants and from biogases.<\/p>\n<p>The same definition is found in the Law on the Regulation of the Electricity Market of 2021 (L.130(I)\/2021), as well.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Who are the key political and regulatory influencers for renewables industry in your jurisdiction? Is there any national regulatory authority and what is its role in the renewable energy market? Who are the key private sector players that are driving the green renewable energy transition in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The renewables industry is under the umbrella of the Ministry of Energy, Commerce and Industry (MECI), Energy Services Department. The said department is responsible for the planning, coordination, and implementation of energy policies and projects in Cyprus. It plays a key role in supporting the development of renewable energy projects and implementing the National Energy and Climate Plan of Cyprus.<\/p>\n<p>In order to ensure a sustainable energy future, the Republic of Cyprus has engaged with the International Renewable Energy Agency (IRENA) to develop a renewable energy roadmap for the country. IRENA is an intergovernmental agency that works with countries to transition to greener energy futures while maintaining economic growth and social development.<\/p>\n<p>The Cyprus Energy Regulatory Authority (CERA) is the national Independent Energy Regulatory Authority of the Republic of Cyprus, which is entrusted with the regulatory control of the proper functioning of the internal electricity and gas market in accordance with the provisions of Directives (EU) 2019\/944 and (EU) 2009\/73\/EC.<\/p>\n<p>Among others, the European Bank for Reconstruction and Development (EBRD) has played a significant part in increasing renewable energy in the island by financing five solar parks across the island adding a capacity of 11.9MW. Further, a Cyprus company with Swedish investors is currently operating over 13 solar power parks. Other significant private sector players that are driving the green renewable energy transition in Cyprus are EnergyIntel, HELLENiQ ENERGY and many more.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the approaches businesses are taking to access renewable energy? Are some solutions easier to implement than others? If there was one emerging example of how businesses are engaging in renewable energy, what would that be? For example, purchasing green power from a supplier, direct corporate PPAs or use of assets like roofs to generate solar or wind?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Businesses in Cyprus are adopting several approaches to access renewable energy sources, including, inter alia:<\/p>\n<ul>\n<li>On-site Generation: Many businesses are investing in on-site renewable energy generation systems, such as solar photovoltaic (PV) installations.<\/li>\n<li>Power Purchase Agreements (PPAs): Some businesses opt to enter into PPAs with renewable energy developers. Through these agreements companies are allowed to purchase a predetermined amount of energy generated from renewable sources over a specified period.<\/li>\n<li>Off-site Renewable Energy Procurement: Businesses also procure renewable energy from off-site sources by signing contracts with energy suppliers who specialize in generating renewable power.<\/li>\n<li>Government Incentives and Programs: Cyprus offers various government incentives and support programs to encourage businesses to transition to renewable energy. These incentives include financial grants, tax incentives, or favorable regulatory frameworks, making it easier and more cost-effective for businesses to invest in renewable energy systems.<\/li>\n<\/ul>\n<p>The choice of approach depends on factors such as available resources, financial capacity, location, and long-term energy goals. Each approach has its advantages and challenges, and businesses in Cyprus evaluate these factors to determine the most suitable approach for their specific needs and circumstances.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has the business approach noticeably changed in the last year in its engagement with renewable energy? If it has why is this (e.g. because of ESG, Paris Agreement, price spikes, political or regulatory change)? What are the key developments in renewable energy in your country over the last 12 months?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Admittedly, within the last year an increasing number of businesses are transitioning towards renewable energy solutions. This may be explained, among others, by the increase of the electricity prices in Cyprus (fossil fuels based). To this end, even more businesses proceed with installation of solar panels on their buildings for on- site generation of energy in order to reduce energy costs. Further, the Power Purchase Agreements are becoming even more popular among businesses so as to meet their sustainability goals, reduce carbon emissions, and enhance their brand image.<\/p>\n<p>Nonetheless, the eagerness of banking institutions to offer green financing can be considered as a noticeable cause for the turn of the businesses towards renewable energy. Renewable energy projects are increasingly viewed by financial institutions as stable long-term investments with predictable revenue streams.<\/p>\n<p>Some key developments in renewable energy in Cyprus over the last 12 months are; battery storage systems are being installed in several areas across the island that have a total capacity exceeding 300 MW. Also, the launch of the competitive electricity market on 1 October 2025, reformed electricity market in Cyprus and aligned it with the EU Target Models. The aim of this launch was to promote more competition in the market through the introduction of more energy suppliers to decrease the cost of electricity whilst also allowing more renewable energy sources to be integrated in the electricity production sector.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How visible and mature are discussions in business around reducing carbon emissions; and how much support is being given from a political and regulatory perspective to this area (including energy efficiency)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As stated above, by 2030 Cyprus has to meet the -32% reduction target of the greenhouse gas emissions set by the Final Updated Integrated National Energy and Climate Plan of Cyprus covering the period 2021-2030 (which was submitted to the European Commission on 19 December 2024).<\/p>\n<p>The Republic of Cyprus, through EU fundings and by national sources, supports this area by implementing various policies aiming at the long-term vision and goal of creating a low-emission economy and achieving a balance between emissions and absorptions in accordance with the Paris Agreement.<\/p>\n<p>Indicatively, an existing measure that has been included in the Final Updated Integrated National Energy and Climate Plan of Cyprus covering the period 2021-2030 is the Greenhouse gas emissions reduction plan for businesses which aims to contribute to the implementation of additional measures beyond existing policies and measures of the National Recovery and Resilience Plan, aspiring to incentivize businesses to participate in the overall transformation of the economy by exempting them from carbon emissions while recognizing their carbon footprint. The scheme aims to provide financial incentives in the form of government grants to encourage the reduction of greenhouse gas emissions through the submission of documents and studies that include specific actions aimed at reducing greenhouse gas emissions. It is targeted exclusively at Small and Medium-sized Enterprises (SMEs) and\/or Large Enterprises that do not participate in the Greenhouse Gas Emissions Trading System. The Grants Scheme is implemented within the framework of Measure C2.1I4 of the Recovery and Resilience Plan of the Republic of Cyprus (RRP) for the period 2021-2026 and will be funded by the Recovery and Resilience Mechanism (Regulation (EU) 2021\/241).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are rights to explore\/set up, interconnect or transfer renewable energy projects, such as solar or wind farms, granted? How do these differ based on the source of energy, i.e. solar, wind (on and offshore), nuclear, carbon capture, hydrogen, CHP, hydropower, geothermal; biomass; battery energy storage systems (BESS) and biomethane?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>First of all, the licensing of activities related to electricity is regulated by the Law on the Regulation of the Electricity Market of 2021, the Regulations on the Regulation of the Electricity Market (Licensing) and the Regulatory Decision 02\/2021 entitled \u201cRegulatory Framework for the Granting of the General Licence (Regulatory Administrative Act No 523\/2021).<\/p>\n<p>In order to participate in the Electricity Market, it is a prerequisite to obtain a licence from Cyprus Energy Regulatory Authority (CERA) in accordance with articles 26 and 27 of the Law on the Regulation of the Electricity Market of 2021.<\/p>\n<p>Pursuant to article 27(4) of the said law, CERA may grant an exemption from obligation to hold a licence for (a) generation of electricity for own use from systems with a capacity of more than 30kW up to 1MW, and (b) generation of electricity from renewable energy power plants with a capacity of more than 50kW up to 8MW.<\/p>\n<p>Further, a general licence may be issued for specific activities as per article 27(1) of the said law.<\/p>\n<p>For such licences to be issued, the interested person must submit the application form and all the requisite documents\/information alongside with a prescribed fee to CERA. The CERA will inform the applicant about the following actions. Currently, the issuance of such licences is governed by the Regulation on the Electricity Market (Issuance of Permits) Regulations of 2004 (Regulation 538\/2004).<\/p>\n<p>As stated above, there are different types of licences depending on the purpose needed and the scope of operation, i.e., general licence, construction and operation licence, energy storage system installation licence, energy storage system operation licence, supply licence, electricity market operator licence, balance responsible party licence, aggregator licence, interconnection line owner licence, interconnection line operator licence, licence for regulator of close system distribution, therefore, each case must be examined based on its own instances.<\/p>\n<p>In addition to the above, planning and building permits must be obtained by the relevant planning and building authority, respectively prior the construction of a park. With respect to planning and building permits, Decree No. 1\/2024 was issued by the Minister of Interior in June 2024. The aim of Decree 1\/2024 was the following:<\/p>\n<p>(a) to establish principles and criteria that will allow, on the one hand, the creation of sustainable RES facilities and, on the other hand, their harmonious integration into the natural and man-made environment,<\/p>\n<p>(b) to determine specific parameters of the spatial policy for energy production projects from RES by category,<\/p>\n<p>(c) to contribute to the transition to a climate-neutral economy and to enhance the penetration of RES into Cyprus\u2019 energy system, with the central guiding principle being the protection of the environment, the landscape, cultural heritage, and other necessary land uses,<\/p>\n<p>(d) to create an effective licensing mechanism for RES facilities, so that the goals of national and European policies can be achieved.<\/p>\n<p>Decree 1\/2024 provides that currently, an evaluation of areas to be designated as RES Reception Zones is underway once completed Decree 1\/2024 will be amended accordingly.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the government directly involved with the renewables industry (auctions etc)? Are there government-owned renewables companies or are there plans for one?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The government is not itself directly involved with the renewable industry.<\/p>\n<p>However, the Electricity Authority of Cyprus (EAC), a public corporate body, is involved in the renewable industry. The EAC is making efforts to reduce island\u2019s dependence on fossil fuels and promote RES.<\/p>\n<p>Additionally, EAC\u2019 s attempt to reduce its dependence on fossil, includes the operation of a Solar PV Park at Nicosia area. Further, EAC has also begun work on the construction of a new 12MW Solar PV Park in the Akrotiri area in Limassol. Moreover, in the context of a joint venture between EAC and the Holy Archbishopric of Cyprus, the design is now complete for a large Photovoltaic Park in the Achera area.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please provide a brief overview of key legislation and regulation in the renewable energy sector, including any anticipated legislative proposals.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Regarding the key legislation and regulation in the renewable energy sector, we set out, indicatively, the following: &#8211;<\/p>\n<p>(a) For the purposes of harmonization with Article 57 of the European Union Act entitled: \u201cDirective (EU) 2019\/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market in electricity and amending Directive 2012\/27\/EU\u201d, and Article 39 of the European Union Act entitled: \u201cDirective 2009\/73\/EC of the European Parliament and of the Council of 13 July 2009 on common rules for the internal market in natural gas and repealing Directive 2003\/55\/EC\u201d, the Law on the Establishment and Operation of the Energy Regulatory Authority Law of 2021 was adopted.<\/p>\n<p>(b) For the purposes of harmonization with European Union Directive 2003\/55\/EU of the European Parliament and of the Council of 26 June 2003 on common rules for the internal market of natural gas, the Law on the Establishment on the Natural Gas Market Law 2004, as amended, was adopted.<\/p>\n<p>(c) For the purposes of partial harmonization with the European Community act entitled &#8220;Directive (EU) 2018\/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources&#8221;, the law on the Promotion and Encouragement of the Use of Renewable Energy Sources of 2022 (L.107(\u0399)\/2022) was introduced which repealed the laws on the Promotion and Encouragement of the Use of Renewable Energy Sources of 2013 \u2013 2018 (L.112(I)\/2013).<\/p>\n<p>(d) For the purposes of harmonization with the European Community act entitled &#8220;Directive 2006\/32\/EC of the European Parliament and of the Council of 5 April 2006 on energy end-use efficiency and energy services&#8221; the Energy Efficiency in the Final Use and Energy Services Law of 2009 was introduced and amended by Laws 53(I)\/2012, 56(I)\/2014 and 149(I)\/2015.<\/p>\n<p>(e) Last but not least, the Law on the Operation of the Renewable Energy Sources and Energy Saving Fund of 2022 (108(I)\/2022), the purpose of which is to grant and\/or subsidise various investments and activities for the promotion of energy from renewable sources and energy saving.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any government incentive schemes promoting renewable energy (direct or indirect)? For example, are there any special tax deductions or subsidies (including Contracts for Difference) offered? Equally, are there any disincentives?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are a number of policies and schemes aiming the promotion of renewable energy and in order for Cyprus to meet its EU obligations.<\/p>\n<p>One example concerns the household consumers with building permits issued before 2017, the operation of a sponsorship scheme providing financial support for the installation of PV systems for self-consumption purposes will continue. Increased sponsorship is provided for vulnerable consumers and residents of mountainous areas. Additionally, the implementation of subsidy programs (Energy Saving &#8211; Upgrade Plans) for the installation of PV systems for self-consumption will continue for non-residential consumers (commercial, industrial facilities, municipalities, etc.) in combination with energy efficiency measures. Significant investments are also planned for network upgrades and the introduction of smart meters to facilitate further penetration of renewable energy generation.<\/p>\n<p>Additionally, in the Heating and Cooling sector, the implementation of support schemes continues to provide financial incentives for the installation or replacement of solar hot water systems in households. Additionally, measures will be implemented to further promote high-efficiency heat pumps for heating and cooling. Alongside, sponsorship schemes for the energy upgrade of existing buildings continue, including subsidies for renewable energy heating and cooling systems (solar thermal, heat pumps, geothermal systems, etc.).<\/p>\n<p>Nevertheless, the green tax reform has been deemed necessary to address the shortcomings identified in the management of environmental issues based on the EU Country-Specific Recommendations 2020 for Cyprus, focusing on three areas: waste management, water resources, and climate change\/atmospheric pollution. As a result, it was included in the Recovery and Resilience Plan, with provisions for the preparation, design, and implementation of the reform, with the contribution of experts through technical assistance from the European Commission.<\/p>\n<p>Additionally, following the new tax reform package that entered into force on 1 January 2026, the Income tax Law of 2002 (Law 118(I)\/2002) was amending to include new tax deductions for taxpayers in respect of energy efficiency and green investments. The new tax deductions are as follows:<\/p>\n<ul>\n<li>Up to \u20ac1,000 for improving the energy efficiency of the primary residence in Cyprus<\/li>\n<li>Up to \u20ac1,000 for the installation of technical energy efficiency systems of the primary residence, renewable energy systems and batteries for storage of electricity.<\/li>\n<li>Up to \u20ac1,000 for electric vehicles that are registered with the Department of Road Transport.<\/li>\n<\/ul>\n<p>The aforementioned study, completed in November 2022, has highlighted that the implementation of the reform is expected to make a significant contribution to achieving national targets for reducing GHG emissions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How does the structure of the natural gas industry in your country impact the price of electricity? Are there any plans to de-link the price of renewable electricity from gas prices? Are there plans in your jurisdiction to keep open coal plants originally scheduled for retirement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>At the moment Cyprus has one of the highest electricity prices in Europe, due to high reliance on liquid fuel for power generation. The country&#8217;s energy infrastructure is isolated, lacking interconnections with neighboring countries, which exacerbates price volatility and limits access to alternative energy sources. There have been plans in place for the development of interconnectors, such as the EuroAsia Interconnector, with the President of the Republic of Cyprus recently stressing that The Cyprus-Greece electricity interconnection, a key component of the EuroAsia Interconnector project, aims to end Cyprus\u2019 energy isolation by linking its electricity grid to the European network via Greece. The project is seen as a strategic step toward enhancing energy security and promoting renewable energy integration in the region. However, there is still a long way from any potential fruition and the future of this project appears to remain uncertain.<\/p>\n<p>In Cyprus there are currently no coal power plants in operation. The three major power plants operated by the Electricity Authority of Cyprus (EAC) (Vasilikos power plant, Dhekelia power plant and Moni power plant) which are responsible for generating electricity for the island and are primarily fuelled by heavy fuel oil, diesel oil or natural gas.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the significant barriers that impede both the renewables industry and businesses' access to renewable energy? For example, permitting, grid delays, credit worthiness of counterparties, restrictions on foreign investment, regulatory constraints on acquisitions; disputes\/challenges?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>During the preparation of Cyprus\u2019 previous National Energy and Climate Plan, studies identified significant technical limitations affecting the further penetration of renewable energy sources (\u201cRES\u201d) into the national electricity system. Due to the isolated nature of Cyprus\u2019 electricity grid and the fact that the network was historically designed around large centralised generation units rather than decentralised RES generation, increasing RES penetration has created growing grid stability and curtailment challenges.<\/p>\n<p>As a result, further large-scale deployment of commercial RES projects increasingly requires the integration of energy storage systems and substantial grid upgrades in order to maintain system reliability and minimise production interruptions. Whilst these developments support the long-term energy transition of Cyprus, they also increase project development and operational costs, potentially affecting the competitiveness of certain renewable energy investments.<\/p>\n<p>Furthermore, due to the small size of the Cyprus market, the cost of most RES systems is comparatively higher than in other European countries. Additionally, the high cost of land, combined with limited availability of suitable land, limits the widespread development of RES projects.<\/p>\n<p>In addition to the above, the regulatory and policy framework in some cases pose barriers to the expansion of RES projects in Cyprus by being time consuming and requiring long list of permitting processes and bureaucratic hurdles. Decree 1\/2024 has also imposed heavy environmental related restrictions, limiting to a significant extent the areas on which RES facilities can be built on.<\/p>\n<p>In some cases, lack of available capital, high upfront costs, and perceived risks associated with renewable energy investments can hinder project development. However, EU fundings, governmental funding plans and private sector investments do exist to overcome such issues.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key contracts you typically expect to see in a new-build renewable energy project?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A new-build renewable energy project involves a range of contracts that vary depending on the project type, size, and financing. Here, we outline some commonly encountered contract types in such projects:<\/p>\n<ul>\n<li>Lease agreements or Sale and Purchase Agreements for the land where the project will be located.<\/li>\n<li>Construction contracts.<\/li>\n<li>Permits.<\/li>\n<li>Grid Connection Agreements.<\/li>\n<li>Operation and Maintenance (O&amp;M) Contracts.<\/li>\n<li>Power Purchase Agreements (PPAs).<\/li>\n<li>Financing Agreements.<\/li>\n<li>Insurance policies<\/li>\n<\/ul>\n<p>These contractual relationships address various aspects of project development, facilitating its successful implementation within the renewable energy sector.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on the import or export of renewable energy, local content obligations or domestic supply obligations? What are the impacts (either actual or expected) in your jurisdiction of the implementation of the Net Zero Industry Act (EU) Regulation 2024\/1735 or the \u201cforeign entity of concern\u201d regulations in the U.S.?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, Cyprus does not yet engage in exporting renewable energy.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How has deployment of renewables been impacted in the last year by geopolitical uncertainties and other non-country specific factors: For example, the conflict in the Middle East, financing costs, changing tariff regimes, supply chain or taxes or subsidies (e.g. the impact of the One, Big, Beautiful Bill on the tax credits and other incentives created by the Inflation Reduction Act in the U.S.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As per the Final Updated Integrated National Energy and Climate Plan of Cyprus covering the period 2021-2030 (which was submitted to the European Commission on 19 December 2024), the global health crisis of 2020, the economic impacts of the war in Ukraine, and the prolonged high imported inflation of the last year created significant challenges for the Cypriot economy. The need to promote energy security through diversification of energy sources became even more pronounced with the war in Ukraine, while the ongoing price increases compelled the government to take additional measures to mitigate inflationary pressures.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Could you provide a brief overview of the major projects that are currently happening in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Cyprus has some of the best conditions within Europe for the production of solar energy, and in this respect several foreign, as well as, local investors are currently developing a number of solar PV projects in Cyprus.<\/p>\n<p>Indicatively, an environmental impact assessment (EIA) has been submitted for a renewable energy project combining solar PV and energy storage on the Mediterranean island nation of Cyprus. The project would combine 72MW of solar PV with a 41MW\/82MWh lithium-ion battery energy storage system (BESS), making it the largest to-date of either technology type. It would be located in the Akaki area of the Nicosia province and the plan is for construction to be completed by 2028.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are the business models in the renewable energy sector in your jurisdiction adapting to the increasingly significant pace of deployment of BESS? What percentage of deals are standalone, co-located or hybrid? How is the implementation of these business models impacting financing structures?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In November 2024, the government in Cyprus launched a grant support scheme valued at \u20ac35 million which aims to support the installation of battery storage systems of renewable electricity.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is required in your jurisdiction to facilitate confidence in new development and financing in newer areas like offshore wind or hydrogen?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>We are confident that Cyprus has the potential to become a leader in newer areas like offshore wind and hydrogen, leveraging its geographical advantages and renewable energy resources.<\/p>\n<p>In essence, Cyprus has a significant offshore wind energy potential due to its strategic location in the Eastern Mediterranean, which experiences strong and consistent winds. Developing offshore wind projects can diversify the country&#8217;s renewable energy mix and contribute to its clean energy goals. Cyprus can tap into its expertise in the maritime sector and collaborate with experienced offshore wind developers to harness this potential. The installation of offshore wind farms in the exclusive economic zone of the Republic of Cyprus is expected to take place by 2049, reaching 100MW by 2050. For this purpose, technical assistance is underway to improve and\/or establish the necessary legal framework, including the licensing process and financial incentives (grant schemes) for the installation of offshore RES until 2030.<\/p>\n<p>Further, Cyprus, with its abundant sunshine, can explore the production of green hydrogen through electrolysis, utilizing renewable energy sources like solar power. Hydrogen can play a crucial role in decarbonizing sectors like transportation, industry, and heating. Cyprus can focus on developing hydrogen infrastructure, fostering research and development, and attracting investments to become a regional hub for hydrogen production and utilization.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are renewables projects commonly financed in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Renewable energy projects in Cyprus are commonly financed through one of the below options:<\/p>\n<ul>\n<li>Investments by major project developers or companies mainly coming from abroad.<\/li>\n<li>Loans from banking institutions upon competitive terms due to the nature of the projects.<\/li>\n<li>Government Incentives and Grants which are provided to support renewable energy projects in the form of feed-in tariffs, power purchase agreements (PPAs), tax incentives, grants, and subsidies.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is the rising demand for data centres impacting the grid and electricity prices for consumers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The rising demand for data centres is likely to place increasing pressure on Cyprus\u2019 electricity grid, particularly as the island operates as a relatively small and isolated energy system with limited interconnection capacity. Data centres are highly energy-intensive infrastructure assets, requiring substantial and continuous electricity supply not only for computing operations but also for cooling systems and backup facilities. Globally, the rapid expansion of AI-driven and hyperscale data centres has become a major driver of electricity demand growth.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4995<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/142296","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=142296"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}