A new study has found that renewable electricity has already delivered substantial economic benefits to Cyprus, saving the country hundreds of millions of euros and offering strong returns on investment.

The research, authored by professor Theodoros Zachariadis of the Cyprus Institute, was prepared for the environmental organisation Terra Cypria as part of a project funded by the European Climate Foundation.

The study challenges the common perception that the penetration of renewable energy in Cyprus remains slow.

While this is partly accurate, it also showed that electricity from photovoltaics has expanded rapidly in recent years, more than doubling within three years.

According to the findings, renewable electricity has already saved the Cypriot economy significant resources by reducing the need for additional fossil fuel imports and cutting back on purchases of carbon emission allowances for power plants.

In addition, renewables have also contributed to lower levels of air pollution.

By the middle of 2025, renewable energy deployed during the decade from 2015 to 2024, primarily solar photovoltaics, had produced net benefits of 450 million euros at 2023 prices.

These benefits are projected to continue growing in the coming years, reaching a cumulative total of 2.7 billion euros by 2035.

If avoided air pollution costs are included, the net benefits could climb to as much as 4.8 billion euros.

The study emphasised that the advantages of solar power significantly outweigh its costs, with returns estimated at ten to seventeen times higher.

Moreover, each megawatt of solar photovoltaics installed in Cyprus over the past decade is expected to deliver net economic benefits of between 5 and 9 million euros throughout its lifetime.

The report acknowledged, however, that the calculation of economic benefits will change going forward.

With the electricity system of Cyprus now requiring substantial investment in energy storage as well as expansion and modernisation of the national grid, future assessments must be made using different criteria.

Professor Zachariadis pointed out that the benefits of renewables have not been evenly distributed.

“These considerable economic benefits have spread unequally within the Cypriot society,” he said.

“In the absence of real competition in the national electricity market, most citizens and firms have enjoyed much less the advantages of decarbonisation,” he added.

“Main beneficiaries were investors who developed solar and wind parks as well as about 20 to 25 per cent of the Cypriot households who could afford to install photovoltaic panels and had the space to do so,” he explained.

Zachariadis also said that the study had not assessed the possible adverse environmental impacts of renewables, such as the installation of solar panels and wind farms in areas of high agricultural value and sensitive ecosystems.

“The environmental benefit of improved air quality thanks to renewables exceeds the costs of such adverse impacts,” he stated, while adding that authorities must ensure strict compliance with regulations on renewable projects in valuable farmland and protected natural areas.