Israel currently gets about 43% of its energy from coal and 37% from gas, with renewable energy representing only 0.1%.
It has been looking to change this for some time, and its efforts were boosted by a recent discovery of substantial offshore natural gas reserves. The Government plans to generate 5% of the country's electricity needs from renewables by 2014, increasing to 10% by 2020. It believes this will result in US$5b (€4b) investment and deliver 2.76GW by 2020.
Israel's electricity sector is regulated by Electricity Law 5756-1996 which aims to ensure the reliability, availability, quality and efficiency of its electricity distribution, promote competition and lower costs.
The Israel Public Utility Authority approved a FIT policy in June 2008 covering small domestic and commercial solar and wind plants.
Tariffs have been decreased from their original levels for both solar and wind, but the size of acceptable plants and caps has been increased, so solar plants above 12MW can now receive subsidies.
There are further support mechanisms for renewable energy including tax cuts, tax exemptions, facilitation of land availability and investment grants.
The Renewable Energy Association of Israel was established in 2009. It lobbies and promotes renewable energy implementation by Israel's various authorities and ministries.
Israel is involved in research efforts, including the BIRD Energy program for joint US-Israeli renewable energy development.
Israel Electric Corporation, almost entirely state owned, supplies nearly all its electricity. It builds, maintains and operates most power stations, substations and transmission and distribution networks.
Israel's grid can currently only absorb between 5%-20% of its energy from renewable sources, so investment will be needed to meet renewable energy generation targets. It also has no interconnection with neighboring countries (except Gaza and the West Bank), which could prevent large-scale electricity export.
In 2009, Israel's solar PV market grew morethan any other country's, with a near 20 fold increase over 2008 and an additional 21.5MW capacity installed.
Installed capacity is now 61MW, around 88% of which represents grid-connected systems, growth due in part to Israel's excellent resources, with some regions boasting 350 days direct sunlight a year.
Solar CSP is also expected to grow significantly, with over 300MW of plants currently planned. A 240MW thermal plant is due for construction at Ashalim in the western Negev desert, costing US$750m (€552m), and operational in 2014.
Israel also has relatively good natural onshore wind resources, with a potential 2.5GW. Current installed capacity is only 6MW though, and the Government has set a target of 800MW by 2020.
In September 2010, Israel's Prime Minister gave “national infrastructure project” status to a US$400m (€294m) wind farm on the Golan Heights, clearing it for fast-track regulatory approval. It will be made up of 70 turbines totaling 155MW, and is due to be completed by mid 2012.