Homeowners and businesses across Israel are discovering the financial potential of generating solar power. What many of them do not know is that in certain municipalities you can earn an additional cash incentive on every kWh (kilowatt-hour) fed into the grid – a state incentive known as the urban premium. It is a benefit that makes investing in a solar system even more worthwhile, particularly in urban areas.
What is the urban premium?
The urban premium is a tariff supplement of 6 agorot for every kWh produced and fed into the electricity grid under the guaranteed tariff route. Instead of receiving 48 agorot per kWh you receive 54 – an increase of 12.5%. The benefit applies only to solar systems installed in urban areas that the Electricity Authority has designated in advance.
It was introduced as part of the 2022-2025 electricity reform, whose aim is to encourage self-generation in densely built areas too, where open land and available roof space are usually in shorter supply.
Which cities qualify for the urban premium?
As of 2026 the Electricity Authority has published a list of cities and local authorities where the premium is available – among them Tel Aviv-Yafo, Haifa and Netanya. Click to view the full list
What difference does it make in practice?
Six agorot may look marginal, but across the life of the system it adds up to a meaningful sum that lifts the rate of return on the investment.
Which route is the most worthwhile?
The urban premium can be the tie-breaker in a decision to build a solar system, especially if you are weighing up the different routes and want to get the most out of the system.
At Rotem Energy we provide the full wrap-around service: a complete eligibility check, a profit simulation with and without the premium, matching you to the optimal route, and filing the application with the Electricity Authority – all with personal, professional support.
Frequently asked questions about the urban premium for solar systems
What is the urban premium for a solar system?
The urban premium is a tariff supplement designed to encourage the installation of solar systems for electricity generation in urban areas that have been defined as eligible for the benefit. Its goal is to increase electricity generation from renewable energy within cities and to make use of existing roof space. Eligibility for the urban premium depends on the location of the installation, the tariff arrangement and the conditions set by the Electricity Authority.
What is an urban tariff and how does it affect income from a solar system?
An urban tariff is the term for a solar electricity generation tariff that includes an urban premium supplement, when the installation meets the eligibility conditions. This supplement may increase income from electricity generation and improve the economic viability of investing in a solar system. The actual tariff level is set according to the relevant arrangement and the characteristics of the installation.
What is the Israel Electric Corporation’s urban premium?
The term “the Israel Electric Corporation’s urban premium” refers to a tariff benefit built into the payment mechanism for electricity generated by eligible solar installations. It is important to clarify that the terms of the premium are set by the Electricity Authority and not independently by the Israel Electric Corporation. Receiving the benefit is subject to meeting the conditions laid down in the relevant arrangement.
Which cities are eligible for the urban premium?
Eligibility for the urban premium is determined according to the list of localities published by the Electricity Authority. The cities on the list include Tel Aviv-Yafo, Jerusalem, Haifa, Netanya, Rishon LeZion, Beer Sheva, Ashdod and Rehovot.
Because the list of cities eligible for the urban premium may be updated, we recommend checking the official list before installing a solar system.
View the full list of cities eligible for the urban premium
Can the urban premium be received for generation and storage facilities?
Yes. The urban premium arrangement for generation and storage facilities is intended to encourage the construction of facilities for electricity generation and energy storage in urban areas. However, eligibility is not automatic and depends on the type of facility, its location, its connection date and the conditions of the relevant arrangement. Adding a storage system may offer further advantages in managing electricity, depending on the characteristics of the project.
How do you check eligibility for the urban premium before installing a solar system?
Before installing a solar system with an urban premium, it is important to check whether the property is in an eligible locality and whether the planned system meets the conditions of the arrangement. The check covers the property’s location, the size of the system, the grid-connection characteristics and the appropriate tariff route. At Rotem Energy we support homeowners and businesses throughout the process, from checking eligibility for the urban premium for a solar system, through calculating economic viability, to designing and installing the system.
Want to know whether you qualify for the urban premium?
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