The public debate opened by MEP Fidias Panayiotou over the price of electricity has brought one of the biggest difficulties facing the Cypriot economy and society, with its systemic distortions, to the forefront. We are in a country blessed with abundant sunshine and the potential to produce cheap energy from photovoltaics, yet it continues to depend on expensive imported fuels, while quantities of green energy are curtailed because the system is unable to make use of them.

11th most expensive country

According to the latest Eurostat data for the second half of 2025, Cyprus ranks as the 11th most expensive country in the EU in terms of the nominal price of electricity for households. The price stands at 27.7 cents/kWh, slightly below the European average of 28.96 cents/kWh.

This picture shows that, in absolute terms, Cyprus is no longer among the most expensive countries in Europe. Eurostat also records that Cyprus had the largest annual reduction in electricity prices in the EU — 14.7% — between the second half of 2024 and the second half of 2025.

However, this was not due to domestic changes, but to the fact that the 2022–23 energy crisis eased, while higher taxes and levies were recorded in EU countries. In several countries, government support measures introduced during the crisis were also withdrawn, something that did not happen in Cyprus.

If consumers’ purchasing power is also taken into account (PPS), Cyprus rises to ninth place among the most expensive countries, with the actual burden on the pockets of Cypriot consumers remaining comparatively high.

The 2026 figures are expected to show increases, given the rise in fuel prices due to the war in Iran.

Fidias' challenge

In his “challenge” to the President of the Republic to reduce electricity bills by 20%, Panayiotou raised a valid question, but gave a simple answer.

As he argued, private photovoltaic parks can generate electricity at approximately 5–8 cents/kWh, but this ultimately ends up being sold at levels of 25–30 cents/kWh. He concluded that if the government were to limit these profit margins, electricity bills could be reduced by 20%.

The figures, however, do not support him.

The problem is more complex and lies in the system through which electricity is generated, stored, transmitted, priced and ultimately consumed in Cyprus. Let us look at the data.

Installed capacity of 2,695 MW

The installed capacity of conventional units amounts to 1,478 MW: Vasilikos 868 MW, Dhekelia 460 MW and Moni 150 MW.
Installed wind capacity: 167 MW.
Installed photovoltaic capacity: 1,038 MW.
Installed biomass capacity: 12 MW.

Two other high-efficiency conventional units, one belonging to the Electricity Authority of Cyprus (EAC), with a capacity of 160 MW, and one belonging to private company PEC, with a capacity of 260 MW, are out of service because they run exclusively on natural gas.

The 460 MW at Dhekelia should already have been retired, which is why the EAC, after a huge delay, ordered new 81 MW units that will run on diesel. The new units will be installed gradually until 2029.

All of this is critical to the equation for ensuring adequate electricity supply in Cyprus.

What each technology contributes to generation

Based on data from the Cyprus Transmission System Operator for 2026, the share of energy demand covered by each technology during the first fortnight of each month was as follows:

In January and February, conventional units produced 80–81% of the energy, photovoltaics (together with biomass, the so-called distributed generation) accounted for 12–14%, and wind power for around 6.5%.
In March and April, conventional generation fell to 75%, photovoltaics/biomass ranged between 18% and 20%, and wind power between 5% and 7%.
In May and June, demand was covered by conventional generation to the extent of 69–72%, by photovoltaics/biomass at 22.5–27.5%, and by wind power at 3.4–5.4%.
In July and August, conventional generation covered 73–75% of demand, photovoltaics/biomass 23–24.5%, and wind power approximately 2%.

Residential, small and commercial photovoltaics

Of the 1,038 MW of installed photovoltaic capacity:

640 MW, or 62%, concerns residential systems (net metering) and small commercial installations at businesses (net billing).
400 MW, or 38%, concerns large commercial installations, of which 325 MW are participating in the Competitive Electricity Market, which opened on 1 October 2025, while 76 MW benefit from a guaranteed electricity purchase price regime (feed-in tariff).
Feed-in tariffs apply to photovoltaic and wind farms established through schemes introduced by the Ministry of Energy as an investment incentive at a time when the technologies were extremely expensive and Cyprus was lagging behind in the sector. The cost of these contracts ranges from 16 to 26 cents/kWh.

Since 2023, the EAC, under a decision by the Cyprus Energy Regulatory Authority (CERA), has purchased the electricity generated under feed-in tariffs at a maximum price of 11 cents/kWh, with the remaining cost of the contracts covered by the Renewable Energy and Energy Conservation Fund.

In other words, it is paid by citizens, not through their electricity bills but through the renewable-energy levy and the state budget.

The maths does not add up

With these figures in mind, let us get to the substance of Fidias Panayiotou’s proposal to reduce electricity prices.

According to data presented by the Electricity Market Association (EMA), private renewable-energy producers, who are at the centre of the discussion, account for approximately 6.4% of all electricity traded — that is, electricity participating in the Competitive Electricity Market. The remainder of the Competitive Electricity Market concerns conventional generation.

Consequently, even a very large reduction in the price of that 6.4% of energy cannot easily result in a 20% reduction in 100% of the electricity bill.

In a simulation presented by the EMA, if a price of 11 cents/kWh were used for the green energy in question, the estimated impact would be approximately 1.8%, rather than 20%.

For example, on a €300 bill, the 20% reduction proposed in the challenge would amount to €60, bringing the bill down to €240. A 1.8% reduction, by contrast, amounts to €5.40.

It should be noted that an electricity bill does not cover only the cost of the energy consumed by the customer, but also other charges such as the standing charge, network use and the Renewable Energy and Energy Conservation Fund levy. Consequently, any “discounts” do not represent the actual picture.

The figures do not stand up

The claim that commercial photovoltaic installations generate electricity at 5–8 cents/kWh and then sell the same electricity to the EAC at 25–30 cents/kWh also does not stand up.

According to information obtained by Politis from renewable-energy producers participating in the Competitive Electricity Market, a fair wholesale selling price — including capital expenditure, maintenance, connection and operating costs, rents, loans, depreciation and profit — is approximately 11 cents/kWh.
During the first 10 months of operation of the competitive market, the average price during solar-generation hours was 14.5 cents/kWh (wholesale price), according to data presented by the EMA. This was the price at which producers sold electricity through the Competitive Electricity Market to energy suppliers (EAC Supply and six or seven private suppliers; private suppliers account for approximately 10% of total electricity consumption).
It should be noted that the wholesale price at which the EAC sells electricity stands at 26 cents/kWh, based on Competitive Electricity Market data.

The curtailments

The calculation of 5–8 cents/kWh could hold if there were no curtailments from photovoltaic parks due to the lack of storage and interconnection.

Between January and May 2026, renewable-energy generation curtailments reached as much as 65%, according to data cited by the sector.

Producers argue that when a park is unable to sell a large proportion of its potential output, the actual cost of the energy it ultimately sells increases significantly. With curtailments of 65%, it may even double.

This does not mean that producers’ calculations should be accepted without scrutiny. However, there is a difference between the theoretical cost of generation and the total economic cost of an investment whose potential output is being substantially curtailed.

So, how much has electricity actually fallen with the competitive market?

According to information obtained by Politis, the Competitive Electricity Market has reduced the cost of electricity by 3–4%.

Not, of course, for residential consumers, but mainly for the 10% of large business customers served by private suppliers.

To date, products for residential consumers that would create the conditions for households to benefit from cheaper electricity — dynamic pricing such as a midday tariff, hourly pricing and so on — have not been developed, although there are suppliers that have expressed an intention to do so.

These include Cyta, which has received the green light to enter the electricity market.

Where Fidias is right

The fact that the 20% price reduction is not substantiated does not mean that the discussion opened by Fidias Panayiotou has no value.

The fundamental question remains entirely legitimate: How can a country with so much sunshine continue to pay so much for electricity?

This is where the real challenge lies.

First, how do we avoid “throwing away” the cheapest energy from photovoltaics?
Second, how do we reduce the price of conventional generation?

We know which measures could lead to a substantial reduction in electricity costs, of up to 30%.

Battery storage. Centralised storage is expected to come online with the start of the new summer season in 2027, while private investment is not progressing at a rapid pace, according to the Cyprus Transmission System Operator.
Promoting household storage through grant schemes.
Creating energy communities and infrastructure to generate energy from waste, thereby also addressing the problem of waste management.
Bringing in natural gas — cheaper than heavy fuel oil and with a lower emissions cost.
Electricity interconnection.

Many of the above should already have become a reality years ago.

Unfortunately, the absence of strategy, amateurism, mistakes and failures are condemning citizens, businesses and the economy to a permanent electric shock.

That is why the real challenge is how we overcome political deadlocks, bureaucratic delays, conflicts of interest and the inability to make and implement decisions, so that we can move forward.

Coup #