The new policy of the Israel Electric Corporation began last year, allowing private customers to install a solar energy system for the production of electricity for their own use, and it found a stakeholder division at the center of a joint venture between Bank Hapoalim and Ofer Semo, the project manager, ready and waiting to take it on.
Until recently, only business customers were able to produce their own electricity and to sell the surplus electricity to the Electric Corporation. Now every family in Israel with a roof over its head can install such a solar energy system and earn twice – by saving on household electricity expenses and by making the system an additional source of continuous and respectable income.
“The price of a solar energy system for private homes or small businesses ranges from NIS 50,000 to NIS 80,000,” explains Semo, “and not everyone can spend that sum of money right away, so we give him 100% financing for the system up to NIS 100,000. This amounts to 99.9% of the systems in the market – a 10-year loan under very favorable conditions. For example, we grant three months ‘grace,’ i.e., a delay in the start of payments for the system to be installed on the roof of the house. The system pays for itself within a few years, and then for 25 years it continues to receive this fixed monthly payment. Many of our private customers tell us that they installed the solar system on their roof so that they will have additional income for their retirement.”
Why did the State of Israel remember only recently to encourage its citizens to use energy from alternative and natural sources?
“A good question, since Israel in the ‘60s and ‘70s led in this field, where every new house built was legally required to install a solar water heater. Since then, most of the developed countries have advanced to solar energy systems, and we have been left with solar water heaters. The change began when OECD members, including Israel, signed a convention on the subject. The State of Israel, for example, committed to reach the point where it produces at least 10% of its energy from ‘clean’ sources by 2020, and by 2030 to 17%.”
And where are we now?
“At the moment, we are only at 3.5-4%, which is a serious lag. Take the Scandinavian countries for example, you know how much of their energy is from clean sources? One hundred percent, they do not use fuel or diesel, they have steam, wind turbines, energy from the sea – and some solar energy from the sun. Even ‘sunny Germany’ now stands at 25% from clean sources, and look where we are.”
What should a private customer do if he wants to start the process of installing a solar energy system on the roof of his home?
“First of all, to find the solar company with which he wants to work, there are now dozens of companies operating in the field from which he can get quotes, and after he has chosen the company and the route he prefers and made the order, he comes to the bank and asks for the appropriate credit. He can do this at any of our branches throughout the country, where every bank has bankers who know the process, which is very simple. By the way, we give this credit to customers of all banks, at the discretion of the branch manager of course.”
Which routes can he choose?
“The first track, which opened last year, is called Net Counter, and it allows you to generate electricity for yourself.” In the second track, which began last August and is called the Tariff Series, the system you built on the roof of your home or business sells the electricity to the Electric Corporation, and you get a nice check every month.”
And the Electric Corporation undertakes to purchase any amount of electricity that the private customers will transfer to it?
“Yes, there is an arrangement here between the Electric Authority and the Electric Corporation, and in general, the electricity generation sector in Israel has been undergoing privatization in recent years because the Electric Corporation is not meeting the growing demand for electricity in Israel. This arrangement is convenient for the IEC because it lowers the load, reduces the use of coal and even legitimizes it because of its important contribution to the environment.”
What is the connection between Bank Hapoalim’s joint value center and the field of green energy?
“The center of shared value deals with the relationships between the bank and all those who have an interest in it, whether the public as a whole, the suppliers, the customers or the employees.”
“We concentrate on projects that have a common value to the bank and to those undertaking them, and the solar field is one of them. It contributes to the environment, reduces pollution and enables alternative green energy. For the customer, this has tremendous value in terms of saving money and producing additional sources of income. This is also an achievement for the bank, both the business activity it produces and the direction of social responsibility, because every environmental issue is targeted. And after all, solar energy systems is the most environmentalist thing there is.”
We talked about domestic customers, and the question is how does this initiative allow business customers to take part in it?
“Of course. Let’s take a garage owner or a farmer, who has a structure with a large unused roof – a cowshed or a chicken coop, for example. This is already a larger system that costs NIS 250,000-350,000 on average. In this case, we prepared for the financing of business customers credit of up to NIS 500,000 for a period of 10 years, which amounts to about 90% of the systems of this magnitude. This mechanic or farmer will have more income, and it’s from a roof that never made for them a single shekel.”
“In general, there has recently been a significant revival in the field. Almost every week there is a conference of customers and a conference of information and assembly and a conference of farmers who suddenly understand the potential of it. Think of this wonderful gift for an Israeli farmer struggling for his livelihood, which he can put on the roof of the cowshed a solar energy system that puts in his bank account a steady monthly flow of money without asking him to do anything!”
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