Tax Breaks to Encourage Green Electricity Production Ready for Vote

Solar panels on top of dairy barn in Kfar Vitkin. The barn uses the electricity created from solar energie. On July 13, 2009. Photo by Chen Leopold/Flash 90. *** Local Caption *** ?????? ?????? ??? ?????? ??? ????? ???? ???? ????? ??????
Solar panels on top of a dairy barn in Kfar Vitkin, Israel. (Chen Leopold/Flash90)

Israelis who produce excess energy based on green technology will be able to sell it to the Israel Electric Company tax free, a new law set to be passed by the Knesset states. The law was proposed by Finance Minister Moshe Kachlon and the Tax Authority as part of efforts to encourage environmental awareness and responsibility.

Electricity that is produced from wind, solar panel photovoltaic, or other renewable energy systems is generally free for use by the individual or group installing it, and the excess can be sold to the Israel Electric Company. The new law, approved for its second and third reading by the Knesset Economics Committee, will allow those sales to proceed tax free, an incentive to install and produce electricity using environmentally sound green technology. The final version of the bill will come up for a Knesset vote in the coming weeks, and is expected to pass without objections.

The exemption will allow for sales of up to NIS 24,000 to proceed tax free. Beyond that, a 10 percent discount will apply up to a specific figure determined by the Tax Authority. For 2016, that figure will stand at NIS 99,006. Individuals or organizations who participate in the program will also be exempt from other charges, such as fees associated with annual tax filings and bookkeeping.

The exemption will remain in place for 25 years, and apply from the first year an individual or group installs or purchases a property that includes a renewable energy electricity production system. The Israeli Association of Green Energy Producers, a private group active in encouraging the installation of such systems, called the new rules “a historic achievement, allowing Israelis to connect with and draw energy from the sun and not have to pay taxes. We will continue working to enable the law to apply to as many people as possible.”


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