Arava Drags Israel into Solar Century with 58.5 MW Project Licensed, Contracted, and Financed

arava solar investment israel
Is the sun finally rising on Israeli solar?

After a very slow start in solar energy production, Israel is finally beginning to join her Arab neighbors fast-forwarding into a solar future, like the Saudis’ $109 Billion Solar Plan to Power a Third of Saudi Arabia.

Arava Power Company, Israel’s only solar developer to make any headway against the entrenched bureaucratic resistance, now has financing and power agreements for eight solar power projects totaling 58.5 MW, valued at (a comparatively high by U.S. standards) $204 million.

In March, the company was given the go ahead by the country’s Public Utility Authority (PUA) to install a 40 MW project, once it got funding from the Obama administration in February.

(Related: Arava’s 40 MW Solar to Power a Third of Touristy Eliat’s Peak Power.)

But the only project to be approved prior to that was (again, Arava’s) small 5 MW installation that we covered in Bedouin Solar Power Activate! Even that tiny project faced months of bureaucratic battles.

Arava plans to ultimately build 400 MW of solar projects, which would quadruple Israel’s current solar capacity of 140 MW.

The reason for the sluggardly growth is its very unambitious clean energy legislation, which seems inexplicable in a land simply brimming with the sort of engineering genius in its “Silicon Wadi” that should have catapulted the country to Middle East dominance in clean energy.

(Related: Chamelic Invents Answer for Desert Solar & Dust! )

It was the Israeli engineers at Luz for example that virtually invented the entire solar thermal industry that has gone overseas. BrightSource Offers World’s Biggest Solar Storage Deal.

Despite all that talent, for example, Arava’s 58.5 MW solar project is to be built by Germany’s energy powerhouse Siemens. The financing is from French and Israeli banking interests, France’s Electricite de France, the Israeli branch of France’s EDF, the Israeli energy investment bank Noy Fund and financiers Migdal Insurance Company, its largest bank, Hapoalim, and Amitim, which funds diaspora projects.

The funding came once a provisional license from the Public Utilities Authority was granted and an agreement to buy the power was signed with the Israel Electric Company.

Although Israel has introduced a feed-in tariff, which includes  projects up to 5 MW, the rates offered are so low as to provide no incentive to solar developers. And it has introduced a 10 percent renewable target (by 2020), but there is really no policy mechanism to get there, and no punishment for failure to.

The right wing government that has dominated Israeli politics has retarded the growth of renewables energy in favor of chasing the vanishing mirage of fossil energy.

Israel's Prime Minister Netanyahu arrives at the weekly cabinet meeting in Jerusalem(Related: Has Israel Become a Petrostate?)
But natural gas is proving to be a volatile misstress. Electricity prices are set to jump 9 percent this year.

A few months ago,  the Public Utility Authority suddenly approved nine licenses in a month totaling 385 MW of utility scale PV, and another 50 small PV installations totaling 116 MW. With these, including the Arava licenses, now approved, things are starting to look up.

Read more on Israel solar:

Could Israel Join With its Arab Neighbors in Medgrid?
Egypt Now Contracting a Whopping 1,000 MW Wind Farm!
Solar Power to Pay off Greek Debt?

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