"Until now, roofs were not an income-producing asset. Since the publication in July of regulations to encourage the installation of photovoltaic systems and their connection to the electricity grid, every owner of a roof who has an Israel Electric Corporation (IEC) electricity meter, can buy a solar power system, install it on his roof, and generate income," says Shikun u'Binui Solaria Ltd. CEO Tali Nechushtan.
Nechushtan added, "The new regulations, which set the subsidies for the owners of the solar systems, state that the government must purchase all the surplus electricity produced from the owner of the solar electricity system for 20 years, and pay four times the rate paid by Israeli electricity consumers. This rate both returns the investment in the solar electricity system and generates income for the roof owner."
Solaria is a unit of Arison Holdings Ltd. subsidiary Shikun u'Binui Holdings Ltd. (Housing and Construction) (TASE: HUCN) held through Shikun u'Binui Environment Ltd. Solaria designs, markets, and installs photovoltaic systems as part of Shikun u'Binui's strategy to promote renewable energy. The company's systems are installed on roofs of homes and businesses.
"Globes": Which roofs are suitable for solar systems?
Nechushtan: "Israeli roofs are flat or with low slopes, and are suitable for solar systems. Israel has plenty of sunshine and the light gradient from north to south is fairly small. Almost every roof is suitable. Flat roofs should be at least 30 square meters, which is sufficient for a home electricity system. The regulations stipulate that a homeowner can install a system of up to 15 kilowatt/hour, and businesses can install a system of up to 50 kilowatt/hour."
Can anyone do it?
"There are three steps needed to convert a roof into an income-generating asset. There must be no building permits for more construction, it's necessary to call a solar advisor to customize the system to the property, and to sign a 20-year contract with IEC. The next step, naturally, is installation. For example, a 40-square meter roof can generate NIS 13,000 worth of electricity a year, and a 500-square meter roof can generate NIS 160,000 worth of electricity a year. When a property is sold, the power selling contract can be transferred to the new owner."
How has the global economic crisis affected the solar energy industry?
"Precisely in times of financial crisis, safe and secure investments that generate a return of about 10% a year with no risk are a good solution."
Published by Globes [online], Israel business news - www.globes-online.com - on March 5, 2009
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