Cyprus energy debate intensifies over electricity costs and renewables

Cyprus is facing intense political and economic debate regarding electricity costs and the management of renewable energy sources (RES). Discussions center on the compensation of RES providers, potential taxation of excess profits, and the ongoing lack of energy storage systems.

An audit report highlighted obstacles faced by the Electricity Authority of Cyprus (EAC) in entering the RES market while land was being allocated to private entities for solar parks. MEP Feydis Panagiotou has criticized the government, alleging that RES companies produce energy at a low cost but sell it at significantly higher rates.

The Cyprus Chamber of Commerce and Industry (KEBE) has called for urgent reforms to maintain economic competitiveness, including accelerating natural gas use for power, upgrading distribution networks, and simplifying licensing for RES projects. Meanwhile, political groups are calling for a comprehensive plan involving energy storage investments, grid upgrades, and the Great Sea Interconnector to end energy isolation.

Government officials noted that electricity prices in Cyprus decreased by 15% in the second half of 2025 compared to 2024. Measures taken to support this include reducing VAT on electricity from 19% to 5% for households and providing direct subsidies to hundreds of thousands of households and businesses.