By Dr. Andreas Prokopiou, former Senior Researcher in the field of Smart Grids at the University of Melbourne and researcher at Électricité de France R&D in France
The proposal publicly put forward on a daily basis by MEP and President of Direct Democracy, Fidias Panagiotou, is simple: he claims that solar farms selling electricity to the grid do so at 25–30 cents/kWh, while their production cost is only 5–7 cents. If the President of the Republic, Mr. Nikos Christodoulides—to whom the “challenge” is addressed—proceeds with a relevant regulation, he argues that every household’s electricity bill could be reduced immediately by 20%.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Mr. Panagiotou’s concern about the high cost of electricity is legitimate. It has been a concern for citizens for years. However, simply highlighting an existing problem is not enough on its own to substantiate a solution with such a specific outcome. Mr. Panagiotou formulates and presents a compelling claim/narrative that the average citizen can hardly verify on their own, since it requires familiarity with how the electricity market actually works. This difficulty places an even greater responsibility on the person making the claim. The very least that anyone who holds or seeks a political or legislative role—or simply chooses to take a public stance on such a complex issue—is to be thoroughly informed before calling for action with such a specific outcome. Public resonance and good intentions cannot substitute for technical documentation. That is precisely the purpose of this text: to explain, in simple terms and with figures that anyone can verify, what the public data actually show from the launch of the Cypriot competitive electricity market, from October 2025 through August 21, 2026 (311 days).
Before we get into the numbers, it’s worth noting something positive: the very fact that this analysis is possible is an achievement of the new Competitive Electricity Market. Simply put, the electricity market operates through two segments: the Forward Market (PTHA), where contracts are concluded for electricity to be delivered at a later date, and the Day-Ahead Market (DM), where, for each half-hour of the following day, a portion of the electricity is bought and sold at a single price determined by supply and demand. During the reference period, slightly more than half of the total traded electricity (approximately 52%) was settled through the DMM, with the remainder (approximately 48%) traded on the Forward Market. Before this reform, such verification would have been virtually impossible for a citizen—or even for an analyst. Today, it is feasible, accurate, and open to anyone who wishes to perform it, regardless of which side they represent. It is one of the most significant benefits of market liberalization, and it deserves to be recognized as such.
The first checkpoint: size
The entire Cypriot electricity market, in terms of what was purchased and paid for during the period, totaled 4,112.2 GWh:
- 45.8% conventional generation (fuel oil) at the PHA
- 34.0% must-run (conventional units required to operate for grid security)
- 7.4% remaining conventional generation in the Day-Ahead Market
- 6.4% (262.0 GWh) solar energy in the Day-Ahead Market (the category which, according to Mr. Panagiotou’s claim, is responsible for the high cost of electricity)
- 6.2% renewable energy in the Forward Market (renewables under National Subsidy Schemes; bilateral contracts with the EAC)
- 0.2% remaining renewable energy on the Day-Ahead Market outside of solar generation hours.
It is mathematically impossible for a measure applied to just 6.4% of the market to reduce the total by 20%, no matter how strict the limit itself may be. The “challenge,” therefore, does not hold up to even a basic numerical check.
Why Is the Share of Retail Parks So Small?
Many will wonder why the percentage is so small. The reason is simple: the vast majority of solar energy does not even enter the market, as it comes from small and residential systems. Of the 996.6 GWh of photovoltaic energy fed into the grid between October 2025 and August 2026, 74.5% (742.2 GWh) came from small, residential systems, and only 25.5% (254.4 GWh) from commercial solar farms. Residential customers have bilateral agreements with the EAC: through net metering with direct energy offsetting (cheap solar power at midday to offset expensive conventional power at night), or through net billing at a fixed rate of 11 cents/kWh. In both cases, this energy remains outside the competitive market. Commercial solar parks are the ones that actually sell to the market, primarily through the Day-Ahead Market. Therefore, before blaming renewable energy sources for high electricity prices, we must accurately distinguish which solar energy is sold on the market and which is not.
The claim of 25–30 cents is not substantiated
The weighted average selling price of solar energy on the Day-Ahead Market ranged from 7.50 cents/kWh to approximately 15 cents/kWh in most months, with the exception of July and August, when it rose to 21–22 cents/kWh; the average for the period was 14.48 cents/kWh (in no case within the 25–30-cent range). It is worth noting that 27.3% of the energy sold by commercial renewable energy parks was paid at less than 10 cents/kWh, and 16.6% at absolutely zero. And what the park owner ultimately receives is even lower, since the fee paid to the licensed entity (“aggregator”) that represents the park in the market is deducted. Based on these figures, the 25–30-cent range is not supported by the market’s actual operating period.
Simulation of the proposal: 1.8%, not 20%
What would happen if the proposal were implemented exactly as proposed? CyprusGrid simulated an 11-cent/kWh cap on solar energy in the Day-Ahead Market during daylight hours (8:00 a.m.–5:00 p.m.) on all 311 days. The weighted average market price would fall from 19.59 to 19.23 cents/kWh—a 1.8% decrease, not 20%—exactly as the 6.4% cap had already predicted. In no single month did the decrease approach 20%: it ranged from 0.5% (May 2026) to 4.0% (August 2026). The difference between 1.8% and 20% is substantial and completely alters the conclusion of the proposal.
The 5–7-cent cost requires a complete picture of the cuts
The cited production cost itself assumes nearly full utilization of a solar farm’s potential output. However, curtailment of solar power in Cyprus exceeded 65% between January and May 2026. At a curtailment rate of 60–65%, the nominal cost of 5–7 cents translates to an actual cost of approximately 12.5–20.0 cents/kWh for the energy that is ultimately sold. The “gap” that the proposal attributes to excess profits is explained, to a large extent, by the cap itself, which is already hurting the sector. Failing to account for this cut fundamentally distorts the estimate of the actual cost and, by extension, the conclusion.
Renewable energy sources are not the cause of high electricity prices
If the goal is truly to reduce costs, the data show where attention should be focused: on the structural barriers that prevent the system from having affordable energy. Expensive “must-run” power plants, which account for 34.0% of the total market, enter the grid regardless of prices, and the lack of energy storage prevents the transfer of cheap surplus solar generation from peak solar hours to peak demand hours. These are the problems that must be resolved, for the benefit of all, including residential consumers. Must-run units cost €263,650,920 during the reference period (more than many times the cost of the solar energy sold on the Day-Ahead Market). Based on the data itself, attributing responsibility to renewables is not substantiated and shifts attention away from the structural sources of the costs.
Where the real “challenge” lies
There is indeed room to reduce electricity prices, but it lies elsewhere. However, this requires the following, more difficult structural reforms:
- Flexible, fast-responding conventional generation (e.g., natural gas, rapid-response technologies) that would fill the gaps in stochastic renewable energy generation, thereby reducing the need for must-run generation and allowing more low-cost solar energy to enter the system rather than being curtailed.
- In energy storage, primarily in existing, already-permitted large-scale renewable energy projects, so that inexpensive midday energy can be channeled during expensive evening peak hours.
- In smart demand response programs, with immediate activation for both small and large consumers, so that consumption dynamically adapts to the availability of clean energy.
- Electrical interconnections with neighboring systems, for importing and exporting energy.
These four measures target the root cause of the problem (dependence on expensive fuel and inflexible conventional power plants), not a category of generators that is already the cheapest in the system. Anyone who truly seeks to lower prices must address these root causes. The focus on renewable energy is not supported by the findings of the analysis.
What does the data analysis ultimately show?
At no point do the data confirm the “challenge.” The size of the “slice” mathematically rules out a 20% reduction. The price of solar energy actually sold never comes close to 25–30 cents. And the alleged production cost itself assumes conditions that no longer apply to any unit in the Cypriot grid. These are the three basic assumptions of the proposal, and none of them is confirmed. Consequently, the estimate of a 20% reduction is not supported by the available data.
The ability to conduct this verification, figure by figure, is a true achievement of the Competitive Electricity Market. Precisely because the data is now public and verifiable, the responsibility to verify every public policy proposal that cites such specific figures is clear. This applies first and foremost to Mr. Panagiotou, who issued the “challenge,” and equally for every politician, official, commentator, or public figure who chooses to take a stance on an issue that directly affects every household’s income. Anyone who calls for action with a specific outcome has a responsibility to present the calculations supporting it or, if the data do not confirm it, to publicly revise their position. This requirement does not limit the right to an opinion; it simply requires that the opinion be based on data.
Otherwise, the discussion about the cost of electricity is not merely incomplete. It is inaccurate. And when a simplistic claim attributes blame to renewable energy sources while the data points elsewhere, that inaccuracy has real consequences: it can misdirect public discourse and policy decisions. This criticism is not personal. It is a demand for evidence. In the energy sector, claims are judged by the methodology and data that support them.
The views expressed are personal.
