Cyprus' Competitive Electricity Market: One Year On, What Does It Mean for Solar?

On 1 October 2025, Cyprus entered a new phase in the development of its electricity sector with the launch of the Competitive Electricity Market.

One year on, the market is reaching an important milestone. For the solar sector, this raises a practical question: what has the new market changed, and what does it mean for renewable-energy producers and consumers?

The Competitive Electricity Market was designed around the EU Target Model, with mechanisms including forward and day-ahead trading, balancing arrangements and participation by conventional generators, renewable-energy producers and electricity suppliers. CERA formally established 1 October 2025 as the first trading day.

According to EAC, its Supply business has participated continuously since the market's launch, requiring forecasting, calculations and market submissions every 30 minutes. EAC has also acknowledged that the market is still in its early stages and that implementation issues have emerged, particularly around metering data and market-data processes.

Why does this matter for solar?

Cyprus has added substantial amounts of photovoltaic capacity. Ministry of Energy statistics for June 2026 show 1,087.5 MW of installed PV capacity across 107,896 systems. Of this, almost 489 MW was under net metering and nearly 165 MW under net billing, alongside PV capacity operating under other support and market arrangements.

This creates a particular challenge for the electricity market.

A significant proportion of solar generation is associated with self-consumption arrangements rather than participating directly in wholesale market price formation. At the same time, Cyprus' isolated electricity system faces periods when renewable generation exceeds what the system can absorb, making curtailment necessary to maintain system stability. EAC has identified energy storage as an important part of addressing this issue.

A recent Cyprus Mail analysis argued that the first year of the competitive market has not yet produced clearly visible reductions in electricity costs for consumers and questioned how effectively the benefits of low-cost solar generation are being transmitted through the market. These are analytical conclusions, rather than findings that we would present as independently established facts.

There are, however, some developments that are clear.

The market is now operational. Renewable generators can participate in the competitive market, directly or through representation, while consumers have greater scope to participate as active customers and self-consumers.

For solar owners, the longer-term significance may therefore be less about an immediate change to a household electricity bill and more about how Cyprus develops the market around growing renewable generation.

Storage, grid flexibility, accurate metering, transparent market data and appropriate arrangements for renewable generators will all influence how effectively the country's growing solar capacity can be integrated.

The first year is therefore better viewed as the beginning of a market transition rather than its conclusion.

For homeowners and businesses considering solar, the important question is increasingly not simply how much electricity a system can generate, but how that electricity will be consumed, stored, exported and valued within Cyprus' evolving electricity system.

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