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Jerusalem, July 25, 2024 — A landmark reform in Israel’s electricity sector took effect on Thursday, opening up the market to competition and allowing all consumers, including those without smart meters, to select their electricity supplier.
The reform, spearheaded by Energy Minister Eli Cohen, is set to drive significant changes in how Israelis manage their energy consumption and bills.
Previously, only households equipped with smart meters had the option to switch to private electricity suppliers. With this new policy, any residential property owner or renter with an electricity meter can now choose from among seven approved private suppliers.
This move is expected to foster a competitive environment, potentially reducing household energy bills by between five and 20 percent annually, translating to savings of NIS 2 billion to NIS 3 billion (approximately $550 to $820 million) per year.
Smart meters, which continuously record and transmit data on electricity use, have been a key element in the transition towards a more transparent and consumer-friendly energy market. The Electricity Authority aims to have these meters installed nationwide by 2028.
Until then, the new regulations ensure that all consumers have access to a range of suppliers, regardless of their meter type.
The list of available suppliers includes three companies already entrenched in the energy sector—Pazgaz, Amisragaz, and Electra—as well as four major telecommunications firms—Bezeq, HOT, Cellcom, and Partner.
These telecom giants offer the added advantage of extensive customer service networks. Additionally, two companies specializing in the business sector, Mashav Energy and Shikun & Binui, are also on the list of approved suppliers.
Consumers can easily transition to a new supplier online, without the need for disconnection or a technician visit.
The process involves submitting an application to the chosen company, providing necessary details such as the Israel Electric Company contract number, electricity meter number, and personal contact information.
The transition is facilitated through a digital power of attorney, simplifying the switch for users. Contracts with new suppliers can be terminated at any time without penalty, although consumers are advised to review terms carefully before making changes.
In conjunction with this reform, Israel is witnessing increased collaboration between electricity suppliers and solar energy companies.
The regulations now permit suppliers to purchase energy directly from solar fields or the grid, providing a competitive edge to solar energy producers.
Solar energy, being more cost-effective than fossil fuels, allows companies to offer long-term contracts with better rates compared to the grid’s spot prices.
Notable partnerships include Cellcom’s collaboration with Meshek Energy, a kibbutz-owned solar firm, to create Cellcom Energy. Similarly, Electra has joined forces with the renewable energy company Enlight to launch Electra Power.
These alliances reflect a growing trend towards integrating solar energy into the market, driven by rising demand and investor interest in sustainable energy solutions.
Despite the excitement around solar energy, all electricity in Israel is currently channeled through a single grid.
This means consumers cannot choose a specific amount of solar energy but will receive a mix based on the time of day and the prevailing energy production mix.
The shift towards increased solar energy production is, however, expected to make solar fields a more attractive investment and boost the overall sustainability of the energy sector.
This reform marks a significant milestone in Israel’s energy policy, promising increased competition, lower costs, and a move towards more sustainable energy practices.