The sunniest grid in Europe which struggles to use its own sun
Cyprus is one of the sunniest countries in the European Union, and it has covered its rooftops in solar panels. Even so, its electricity is among the dirtiest and most expensive in Europe, and in 2025 it had to switch off almost half the solar power flowing into its local grid. Both of these things directly impact your bill from the EAC, which bakes in costs to help pay for burning fossil fuels — costs that shouldn't even be there, given how much the island generates from solar.
The bill, in plain parts
Every two months a bill arrives from the EAC, the state-owned company that makes most of Cyprus's electricity. It carries one large number, and most of us pay it and move on. The breakdown, though, is printed right beside that number, and it explains most of what follows.
Electricity is measured in kilowatt-hours, and one kilowatt-hour is roughly what it takes to run a washing-machine cycle or keep a fridge cold for a day. Your meter counts how many you use and the bill charges you for each one, with a typical Cypriot home getting through around five hundred every two months. Drag the slider below to your own usage and watch what the total is actually made of.
The cost of generating the power, mostly by burning fuel. The largest part of any bill.
The wires, substations and meters that carry the power to your home, and the people who run them.
Moves up and down each month with the price of fuel. There is more in this line than fuel, as the next section shows.
VAT, together with a few small charges, including one that helps pay for renewable energy.
The bill comes down to four things: making the power, delivering it, a fuel top-up, and tax. Making the power takes the biggest effort and highest cost, but the fuel top-up is the one worth following, because it turns out not to be about fuel at all.
The charge nobody mentions: carbon
To understand that fuel top-up, you need one fact about the way Europe handles climate change.
Brussels sets a hard limit on how much carbon dioxide Europe's power stations and factories may release, and tightens it a little each year. For every tonne they emit, they have to hand over one permit, and those permits are sold at auction, where companies bid for them and the price floats like the price of oil; lately it has hovered near €95 a tonne. None are given to power producers for free, so every tonne they emit is a tonne they have to pay for. The aim is to make burning fossil fuels steadily more expensive, so that cleaner power wins on cost instead. Revenue from these auctions is then split between EU governments, which is supposed to fund the shift to clean energy.
In Cyprus, the EAC bids on the same European market as every other utility, so it has to buy a permit for every tonne it emits. And because the EAC still makes most of its power by burning oil, it has to buy more permits, for more of its electricity, than almost any utility in Europe.
What makes Cyprus unusual is that the two are not really at arm's length. In most of Europe the company that bills you was privatised long ago, leaving the state to set the rules and bank the carbon revenue; in Cyprus the state owns the EAC outright. So the same government that is allocated a share of the carbon auction revenue also owns the company that pays the carbon costs.
So the fuel top-up is really a fuel-and-carbon charge, and even then it shows only a sliver of the carbon cost. Most of the carbon cost is tucked inside the price of making the power, the largest slice from the previous section. Move the permit price below to see how much of a typical bill is really carbon.
Your bill's only mention of carbon is folded into the "Fuel adjustment (incl. greenhouse gases)" line, €15.18 here, which never says how much of it is carbon. At €95 a tonne, about €6 of the carbon is passed through there; the rest, roughly €33, is buried in the base price of the power. Add them up and the real carbon cost of a two-month bill comes to about €39.
All of which raises a fair question: just how dirty is Cyprus's electricity? About 650 grams of carbon dioxide for every unit, which puts it near the top of the European table, behind only coal-burning Poland and many times the figure for countries that lean on nuclear or hydro.
Carbon dioxide released per unit of electricity, recent figures (Ember and the European Environment Agency; Cyprus from EAC, 2024). France runs mostly on nuclear and Sweden on hydro and nuclear, which is why their power is almost carbon-free; Cyprus and Poland burn oil and coal.
The obvious escape is renewables. Sunshine and wind generate electricity without burning anything, so they need no permits at all, and every unit of solar that replaces a unit of oil strips both the fuel cost and the carbon cost out of the system at once. More clean power ought to mean smaller bills. In Cyprus it hasn't, and the reason is the grid.
Where Cyprus actually sits
For businesses the picture is simple. For households it is more complicated, and more revealing.
Electricity prices for businesses, late 2025, cents per unit (Eurostat). Cyprus pays the second-highest in the EU, behind only Ireland.
Households are harder to compare, because a euro stretches further in some countries than others. The fairer measure adjusts for what a euro actually buys locally, and on that basis Cyprus was the second most expensive place in the European Union to run a home as recently as late 2024.
Household electricity prices, second half of 2024, adjusted for local purchasing power (PPS per 100 kWh, Eurostat). On this measure Cyprus ranked second in the EU, behind Czechia; the €39.43 Germany paid in cash worked out cheaper once local prices are accounted for.
Since the end of 2024, prices fell further here than anywhere else in the bloc, dropping almost 15% over the course of 2025, which carried Cyprus back toward the middle of the pack.
The fall had little to do with policy. Almost all of Cyprus's electricity is made by burning oil, so as the price of oil rises and falls, so does the cost of generation, and therefore the size of the consumer bill.
Oil prices dropped through 2025, with the global benchmark averaging about $69 a barrel against $81 the year before, and because oil weighs far more heavily in the Cypriot bill than in most others, the island's bill fell further than any in the EU.
Why, then, did the rest of Europe not feel the same relief? Across the EU the share of the average bill made up of taxes and levies actually rose over the same period, from about 25% to 28%, which absorbed much of the saving from cheaper power. In Cyprus the fuel-driven fall was large enough to push the total down anyway.
None of this is relief from the underlying problem. Cheaper oil is the very thing that pushes the bill back up the moment it reverses, and in 2026 it has already begun to. Early in the year a conflict in the Middle East closed the Strait of Hormuz, the channel through which nearly 20% of the world's oil passes, and drove the price to around $138 a barrel, its highest since the 2022 energy crisis, before it eased back again as a ceasefire took hold. Where it settles from here is anyone's guess, but for an island that makes its electricity by burning oil, a swing of that size reaches the end consumer regardless.
The sun it can't use
Cyprus has plenty of panels, but nowhere to put the power when the sun is high and demand is low.
An electricity grid has to stay in balance every second, with the power flowing into it matched by the power being drawn out. Cyprus runs into the opposite of a shortage: its rooftops and solar farms generate more than the island can use, and because there is no cable to send the surplus abroad and almost no batteries to store it, that excess has nowhere to go. At that point EAC (TSO) does the only thing it can and switches some of the solar off.
An illustrative clear spring day at today's installed capacity, where the curtailment works out near the annual figure below. Drag the panels upward and the midday solar climbs past what the island can absorb; because the grid keeps some oil plants running for stability, solar can only fill the gap beneath them, and the surplus on top is switched off. The shapes are schematic; the percentages Cyprus actually records over a year are in the chart below.
The industry calls this curtailment, and in Cyprus it has gone from rare to routine. In 2022 the grid turned away just over 3% of the solar feeding into it; by 2025 it was turning away 47%, almost half. The practical effect is that each new panel installed adds less clean power than the one before, because the bottleneck is now the grid, not the amount of sunshine.
Share of the solar feeding the local grid that was switched off because the grid could not absorb it, 2022 to 2025 (CyprusGrid, independent analytics). In 2025 the wasted power came to 306 million units, roughly a year's electricity for 51,000 homes.
Cyprus was an early champion of solar power, and for decades it has led Europe in solar water heating, the familiar panels that warm the hot-water tank on the roof. It's somewhat ironic that it has then tried to use that same solar power for electricity, only to throw much of it away because the grid cannot hold it. The oil-fired stations, meanwhile, never fully stop, because the EAC keeps a core of them running at all hours to hold the system steady. So even at midday on a clear day, some oil is burning, and the EAC is still buying permits for it.
Solar is not the whole story either. Cyprus also has a modest amount of wind, around 155 megawatts of it, which matters more than the figure suggests, because the wind tends to blow in the evenings and through the winter, exactly when the sun is down and the grid is under most strain. It is the kind of generation that would ease the squeeze, and yet it too is switched off when the system cannot take it, and at about 20% of the solar capacity it is far too small to close the gap on its own. Between them, sun by day and wind by evening, Cyprus has the makings of a clean grid it isn't yet using.
Why other sunny countries pulled ahead
Cyprus draws less of its power from renewables than almost anywhere in the EU, and the reason is not a shortage of sun.
Share of electricity from renewable sources, 2024 (Eurostat). Cyprus and Malta, the two small isolated islands, sit at the bottom of the table.
Cyprus's solar share alone tops 20% of its electricity, which puts it level with Greece and Spain. What holds the overall figure down is everything around the solar: little wind, no hydro to speak of, and a grid that throws away a large part of the sunshine it captures. Greece, Spain and Portugal pulled well ahead for two reasons. They are larger, and they are connected, wired into the European grid in a way that lets them borrow from their neighbours when their own wind and sun fall short, and absorb far more renewable power without having to waste it.
Then there is Malta, the other small Mediterranean island, and the example Cypriots reach for whenever they argue that the cure is obvious. Malta has the second-cheapest household electricity in the European Union, after Hungary. But the cable to Sicily is only part of the reason, and research on that link found that on its own it would not have lowered prices by much. Malta also switched from oil to gas, and, most crucially and least discussed, holds the price down with a direct subsidy from the state budget, worth around €150 million a year, under a temporary EU exemption that runs out in July 2027. The same subsidy in Cyprus would cost roughly 2.8% of national income every year. Malta has not so much solved the problem of island energy as bought its way around it, for now, by moving the cost from the household onto the state.
The household's turn
For anyone fitting solar panels in 2026, the economics changed at the start of the year, and things are still evolving with the introduction of household battery storage.
A typical home system, for example a 6.4-kilowatt array (which would cost you around €6,800), produces far more electricity on a sunny midday than the household can use at that moment. Most of its value therefore comes not from the power you use directly but either (1) from what you are paid for the surplus you send back to the grid, or (2) being able to store that power for use later in the day. Currently, most households will be on one of two schemes, net metering or net billing.
A unit you sent to the grid at noon cancelled a unit you drew back at night, valued at the full retail price. Only the net difference was billed, and a well-sized system could pay for itself.
You still pay the retail price for what you draw, but your surplus is now bought from you at the lower wholesale price. On a crowded grid it may be refused altogether. The remedy is a battery, paid for by you.
Retail is the price you pay for a unit of electricity; wholesale is the lower price paid to the people who generate it. Under the old scheme a unit you exported was valued at the retail price, as though it simply cancelled a unit you used later. Under the new one that exported unit is bought from you at wholesale, while the units you draw back in the evening are still charged at retail, and the gap between the two is the difference you need to pay.
There is a second blow, and it ties in to what we mentioned earlier about battery storage. As the grid fills up, EAC (TSO) has begun switching off not only large solar farms but household systems as well, cutting them out in rotating groups, with no special protection for poorer or vulnerable customers. A family that fitted panels in good faith, expecting to sell their surplus, can now find that surplus refused outright. The official remedy is to install a home battery and stop exporting, but these systems are currently prohibitively expensive for most households, with no true understanding of payback periods. You could argue that the EAC is trying to move its failure to build storage onto the end user.
All of this assumes a household with a roof of its own and money to spend, which isn't always the case. Many households will have taken out loans to pay for the solar panels, calculating payback periods and savings to make it worth it, but with EAC (TSO) switching their solar surplus off, those calculations can quickly start falling apart.
More than half the population is reckoned to be energy-poor on the EU's broad measure, and about 19% say they cannot keep their home warm enough, more than double the EU average. Cyprus also has the highest proportion of homes in the EU affected by damp, mould or a leaking roof.
Somewhere to put the power
The one thing the grid has always lacked, storage, is finally being built, though not yet at the scale the problem needs.
For years the missing piece has been storage. With no batteries to hold the midday surplus and no cable to send it abroad, the island's only options were to waste the solar or keep the oil burning, and it did both. That is starting to change. After a decade of talking about it, Cyprus has begun building grid-scale batteries, the one thing that could let it keep the power it currently throws away.
The first is already running. In 2025 the University of Cyprus switched on a 3.3 megawatt-hour battery beside a solar array at its Apollon park, the largest on the island so far and, at that size, closer to a proof of concept than a fix.
The serious capacity is close behind, and most of it belongs to the grid operator itself. The TSO, the transmission system operator that runs the network and is separate from the EAC that generates the power, has been cleared to build three batteries of its own, at Athalassa, the Free Industrial Zone and Anatoliko, together around 120 megawatts and 400 megawatt-hours. It is a €50 million project, the contract has been awarded, and it is due online during 2026. Cyprus's isolation helps for once here: a 2024 EU rule lets the operator own and run storage directly, without the open tender the rest of the bloc requires, because the island has no grid to connect to.
Behind the operator's own kit, more is lining up. The EAC has applied to build two larger systems, 80 megawatts at Dhekelia and 100 at Moni, and the most advanced private proposals add around 150 more. Separately, the operator has handed early connection terms to eight standalone projects, together 231 megawatts and 570 megawatt-hours, all built to run on the market without a subsidy. Where a year ago there was almost none, a storage pipeline is forming.
Grid battery storage by stage, in megawatt-hours. Operational is the Apollon system; contracted is the TSO's three sites (a €50m project due online during 2026); early-stage is eight private projects granted preliminary grid-connection terms. The EAC's own 180 MW of applications and the most advanced private bids are measured in power rather than energy, and are not shown here. Sources: ess-news, energy-storage.news, Balkan Green Energy News, CBN Cyprus, 2025–2026.
This does not solve the problem. Four hundred megawatt-hours sounds like a lot until you set it against a grid that can pour out a thousand megawatts of solar at noon while demand sits near 450: it buys a few hours of cover into the evening, not a way through a whole sunny season of surplus. And storage is only half the missing infrastructure. The other half, the undersea cable that would finally wire Cyprus into a neighbouring grid, is still years and several disputes away. The batteries will take the edge off the waste, but they will not end it on their own.
What would actually lower the bill
The sun is free. The bottleneck is the grid around it, and the choices made about that grid.
Running the power stations on gas rather than fuel oil would cut their carbon emissions by about 33%, and take an estimated 17% off the bill. The terminal built to bring the gas ashore has been years late.
Enough storage to power tens of thousands of homes for a few hours could cut the wasted solar from about 47% to around 10%. It is the cheapest and quickest fix, and a recent change in EU rules finally lets an isolated grid build it.
The Great Sea Interconnector, a roughly €2 billion undersea power cable, would connect Cyprus to the European grid for the first time and end its isolation. Proposed back in 2012, it has been held up by cost and by Turkish objections at sea, and will not arrive before 2029 at the earliest.
There is a fourth lever, and it is the most contested of all. In February 2026 the Auditor General, the official who scrutinises public spending, concluded that Cyprus's own energy policy had produced what he called an oligopolistic market, meaning one dominated by too few players, and that this had helped keep prices high. That is his judgement of course, but it points to a real argument now under way: a competitive market, in which suppliers other than the EAC are allowed to sell power, opened in October 2025. The louder temptation is to copy Malta instead and simply freeze prices, which would bring the number on the bill down, but only by moving the cost onto the state's books — not really a long term solution.
The underlying problem is not really a mystery. Cyprus has the sunshine, and it has built the panels to catch it, both at the household and industrial level, but what it does not yet have is a way to store that power or offload it into another energy grid. Those things are only now starting to arrive, and until they do at scale, the island will keep producing clean electricity it cannot use while paying Europe for the carbon of the oil it burns instead, and the EAC bill that lands every two months will stay high and unpredictable.