Ketura solar energy field: Israeli is finally embracing renewable power.

Israel Has Resisted Solar Energy for Decades. Is That Finally Changing?

Israel Has Resisted Solar Energy for Decades. Is That Finally Changing?

A Closer Look at the New Energy Economy
Aug. 7 2015 12:15 PM

Israeli Solar Warms Up

The country has embraced technological innovation—except in renewable energy. Is that finally changing?

A construction worker in Israel's first solar field, Ketura Sun,
A construction worker in Israel’s first solar field, Ketura Sun, in the Arava Valley, March 21, 2011.

Photo courtesy Arava Power Company

In late July, workers flipped the switch on a large-scale solar field—a 40-megawatt plant covering 134 acres. They hooked it up to the grid in the desert and began delivering emission-free power. There’s nothing particularly noteworthy about this event. Given the rampant growth of solar around the world, this kind of thing happens almost daily, and large solar arrays can now be planned and built in a matter of months.

But this one took six years to come to fruition. And its location is unique. The field, a joint venture of Arava Power and a subsidiary of Électricité de France, is the first utility-scale solar plant to be built in Israel.

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That’s kind of shocking. Modern Israel has become known as “startup nation” for the ability of its nascent tech firms to balloon to global scale in a matter of months. And the country has immense solar resources, with solar irradiance that puts Boca to shame. In 1979, when I lived with my family in a town in the Negev Desert, our house had a solar water heater on its roof. But when it comes to generating electricity through solar power, the startup nation has been more like the “don’t start” nation. The government-owned Israel Electric Corporation has preferred to rely on coal, natural gas, and diesel. A few years ago, Israel set a goal of drawing 5 percent of its energy from renewables by 2014 and 10 percent by 2020. But last year, Israel derived less than 2 percent of its power from renewable sources.

The reasons for this aversion to solar-energy innovation are very Israeli—nationalized ownership of significant resources, endemic bureaucracy, fractious politics, and a legacy of socialism. Ironically, another legacy of socialism—the kibbutz—is behind the development of this solar field and several others.

Over the years, many kibbutzim founded on socialist principles have turned into very good capitalists, building cottage industries into large enterprises—Caesarstone, a feature in high-end kitchen islands and counters, is majority-owned by kibbutz S’dot Yam.

Ketura, a small kibbutz on the western side of the highway that carves through the Arava Valley between the Dead Sea and Eilat, was founded in 1974 by activists from Young Judaea, the Zionist youth movement backed by the Jewish women’s group Hadassah. (Disclosure: I’m an alumnus of the movement’s camps.) With the backing of movement alumni in the U.S. and Israel, Ketura decided to diversify by getting into solar power nearly 10 years ago. In 2006, kibbutz members, as well as former Young Judaea movement members, banded together and raised capital to form Arava Power.

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They had a tough time getting going. In the U.S., people who construct power plants can sell the output to a range of utilities, electricity providers, and even individual companies; meanwhile a latticework of tax incentives helps lower the cost. In Israel, there were no tax incentives and there is only one customer for the output of large power plants: the IEC, the government-owned transmission grid operator. For decades, IEC’s strategy for providing power was to build large power plants along the coastal plain that ran on coal, diesel, or natural gas. (Israel now has big natural gas reserves.)

In 2009, Israel’s government promulgated a national strategy to add solar and wind to the generating mix, which effectively directed the IEC to commit to acquiring a certain amount of renewable electricity from newly constructed plants. Arava Power bid and won a bunch of tenders and enlisted partners, including German industrial giant Siemens. (At about the same time, contracts were also awarded for other groups to build two much larger solar plants at a site called Ashelim in the Negev.) “That enabled us as pioneer developers to begin to put theory to practice and develop our first field,” said Jonathan Cohen, chief executive officer of Arava Power, who immigrated to Israel from England in 1978.

The first one Arava built, a 4.95-MW plant that was Israel’s first major ground-based solar field, was on the grounds of the kibbutz. Before it went live in the summer of 2011, it faced significant obstacles. As Yosef Abramowitz, a co-founder of Arava Power, told the Jerusalem Post when the Ketura Sun field opened: “There are 24 government offices that touched this field here at Ketura.”

In somewhat rapid succession, Arava Power went on to develop six projects, ranging from 450 kilowatts to 8.9 MW, on farming communities in the Arava Valley and the Negev Desert. It took until 2013 to finally get the permits and financing for the large, 40-MW facility that was just completed. In the process, Arava Power, which has about two dozen employees spread between its headquarters in Eilat and an office in Herzliya, north of Tel Aviv, has become a substantial player. Executives say the plants it has built represent an investment of more than 1.2 billion shekels (more than $300 million at current exchange rates). “We have about a 22 percent market share in the ground-based solar market in Israel,” Cohen told me. “And it’s our intention to carry on and build out another 11 medium-sized projects and two large ones” over the coming decade.

But while it has a pipeline of potential projects lined up, Arava Power doesn’t have a customer. The big plant the company just finished was the last project from the set of bids it won several years ago, and the Israeli government and IEC have yet to commit fully to a new round. Working on solar in Israel means lots of waiting—for new quotas to be approved, for cabinets to form after rounds of elections, for policy to change, for the IEC to receive new marching orders. Which means it is subject to the whims of Israel’s Byzantine political system. And with all the turmoil—the war in Gaza, contentious elections, the Iran nuclear deal, the ongoing debate about what to do with the nation’s natural gas resources—solar simply hasn’t been a priority. “The government hasn’t focused on the market for solar and its potential in the same way that the rest of the developed world has,” said David Rosenblatt, a co-founder of Arava Power and the company’s current executive vice chairman.

In spite of the bureaucracy and the speed bumps, Israel’s desert is slowly beginning to bloom with silicon panels that help convert the sun’s rays into electrons. Arava Power’s plant won’t hold its title as Israel’s largest solar generating facility for long. Earlier this summer, construction on one of the long-delayed, 110-MW Ashelim plants began.