Following the unprecedented attack on the Cyprus base of the British Forces, Cyprus tourism sector was not the only one that was affected. After this news electricity bills might rise due to the spike in global fuel prices. Remaining in the state of alert Cyprus consumers are bracing for the projected outcomes, which might affect their household electricity spendings.
In the meantime, over the last few years Cyprus has been leveraging its renewable energy sources and significantly expanding its solar and wind capacities. Let's take a closer look at the Cyprus energy market and explore its challenges and potential. We will also review the current tariffs and explain the electricity bill structure. So, stay tuned!
Executive Summary: 2026 electricity prices forecast at a glance
In 2026 Cyprus still remained amongst the top 10 EU countries with the highest electricity prices. However, starting from January 1, a number of government initiatives aimed at improving electricity market efficiency, have come into effect. One of the most notable changes is the switch within the solar billing structure — from the Net Metering system to the new Self-consumption model. Other government initiatives, such as subsidies for energy storage, expanding renewable energy capacities and introducing competition to the energy supplier market are aimed at stabilising the energy prices and promoting a more sustainable energy ecosystem.
Electricity prices in Cyprus per kWh: current tariffs and calculations
Current EAC tariffs explained: Residential vs commercial
Residential
In Cyprus, all residential customers, residing in private dwellings and utilising electricity for domestic purposes are covered by residential tariffs. These tariffs feature standard low-voltage connection and might include various consumer protection elements such as socially regulated pricing, consumer discounts (for eligible categories), residential solar schemes and night tariff options.
The following premises and activities fall under the residential tariffs category:
- Apartments
- Houses
- Residential buildings
- Home EV charging
- Household solar (self-consumption)
Currently, the following residential tariff options are available:
01 — Standard domestic tariff that charges a flat rate of approximately 10.34 euro cents/kWh (according to recent AEC figures).
02 — Dual (day/night) tariff with two separate billing periods:
- Day: from 9.00 am–11:00 pm — with the base charge of approximately 10.76 euro cents/kWh.
- Night: from 11:00 pm–9.00 am — a discounted off-peak tariff, starting from around 9.44 euro cents/kWh.
08 — Vulnerable Consumer Tariff
It is the special discounted electricity tariff, offered to vulnerable consumer categories, such as:
- low-income households
- pensioners
- medically dependent consumers
Starting from around 8.48 euro cents/kWh, it constitutes the cheapest base rate in Cyprus, which is typically 18—22% lower compared to the standard residential tariffs.
In addition, there are occasional government electricity subsidies, which may be applied during price-crises periods.
Commercial
Commercial tariffs apply to any economic or income-generating activity and are charged for the electricity supply in commercial premises, such as:
- Shops
- Offices
- Restaurants & cafés
- Hotels
- Real estate offices
- Clinics
- Small companies
In addition, if you have a home office, which is used for your business activity, or if you operate a licensed AirBnB accommodation, the electricity consumed on those premises would also have to be charged at commercial rates.
Commercial tariffs tend to be higher, compared to the residential ones.
There are 4 main types of commercial tariffs in Cyprus:
— Low voltage — suitable for small businesses (home offices, individual practices, small retail etc). Low Voltage supply (LV) is connected to the same physical 400V / 230V network as residential users. The base charges typically range from 10.5 – 12.8 euro cents/kWh.
— Medium Voltage Tariff — suitable for larger office buildings, hotels, universities, hospitals, supermarkets etc. This tariff usually covers connection at 11 kV with basic charges starting from 9–11 euro cents/kWh.
— High Voltage Tariff — suitable for industrial premises (heavy industry, airports, heavy data-centres). They are connected to 66 kV or 132 kV power supplies and the base charges start from 8.48–9.65 euro cents/kWh (according to AEC figures).
— Wholesale Tariff — used by licensed electricity suppliers, large industrial users (high voltage), desalination plants, aggregators and energy traders. The Wholesale Tariff prices vary according to consumption periods:
- Off-Peak — from 8.48 euro cents/kWh
- Shoulder — from 9.65–10.50 euro cents/kWh
- Peak — from 12.80 euro cents/kWh
It's important to note that commercial MV and HV tariffs also include an additional «demand charge», and their base tariff rates are calculated as follows:
Energy used (kWh) + Maximum power demand (kW)
Such businesses are charged for the grid stress during peak consumption periods in addition to the amount of kWh consumed. Whereas, residential and LV commercial customers only pay for the amount of kilowatts.
This practice results in larger businesses paying a considerably higher amount per electricity bill, compared to the residential users
Deconstructing your electricity bill: what are you actually paying for?
The electricity bill in Cyprus consists of numerous elements added to the nominal tariff charge, so it's not surprising that the total is significantly higher compared to the base tariff estimates. Now that we have reviewed the basic residential and commercial tariffs, let's explore the other electricity bill components.
1.Basic Energy Charge which can be easily calculated as follows:
Consumed kWh × Domestic tariff price
2.Fuel Adjustment Price can constitute up to 30—40% of the total bill and is calculated by the government using this formula:
(Current fuel price —300) x Coefficient= Fuel Adjustment Price
Please note that Fuel Adjustment Price is extremely volatile and is adjusted monthly by the government.
3.Transmission Systems Charge constitutes the cost of using Cyprus’ national high-voltage grid and covers electricity transportation as well as substation and system operator's costs. It is charged per each kWh consumed, equating to approximately 0.87 euro cents/kWh.
4.Distribution Network Charge covers the cost of delivering electricity to your home, including cables, transformers, maintenance and repair fees, and varies per voltage level. The average price can be around 3.66 euro cents/kWh.
5.Ancillary / System Services charge covers grid stability maintenance, including
frequency control, reserve generation, voltage balancing and is estimated at approximately 0.64 – 0.65 euro cents/kWh.
6.Public Service Obligations (PSO) is a compulsory government charge, covering electricity supply to remote areas, social electricity policies and equal pricing. According to recent AEC information, POS compounds to 0.051 euro cents/kWh.
7.RES & Energy Saving Fund (RES/ESF)
is another compulsory government charge which supports renewable energy schemes and EU climate compliance, compounding to 0.5 euro-cent/kWh.
8.Supply & Metering Charges cover billing service, meter reading and customer support and are charged at a flat rate of 0.48 euro cents/month.
9.VAT
A reduced 9% VAT rate is applied to the subtotal, excluding the RES and POS fees.
According to recent news Cyprus government has decided to extend the 9% reduced electricity VAT rate until 31 March 2027.
For commercial users, the electricity bill has similar components, except for an additional demand charge, which constitutes approximately 6—9 euro/kW per month for Medium Voltage consumers, and 4—7 euro/kW per month
Larger businesses and production facilities are also subject to Capacity Charge and the Power Factor Adjustment charge (in case the electrical equipment causes inefficient power use).
On top of that, a standard 19% VAT rate is applied to commercial electricity bills, with the exclusion of RES and POS fees.
Solar Electricity
Starting from January 1, 2026, national regulatory framework — CERA has rolled out a new Self-Consumption system, replacing the older Net Metering scheme. Let's take a look at how this amendment has transformed the billing structure.
Before January of 2026, all the extra solar electricity was exported to the grid, rewarding the consumer with a 1-to-1 kWh credit. With the introduction of the Self-consumption model, exported electricity is no longer credited 1:1. Instead, consumers are expected to utilize solar energy at the time of production. Under this framework, the imported electricity is charged at full retail price, whilst the surplus energy is sold at market/wholesale value.
Important to note: Compared to the previous Net Metering system, where exported energy was bought at retail price, the new Self-consumption model offers a lower wholesale price. So, the core difference of the new system is that savings depend on consumption at the time of production, rather than production volume.
Pros:
- Reduced dependence of Fuel Adjustment prices
- EU compliance
- Encourages sustainable energy use
- Increases long-term property value
Cons:
- Lower financial return
- High solar battery costs
- Longer solar ROI period
Key drivers shaping Cyprus’s energy prices in 2026
The game changer: Vasilikos’ LNG terminal’s impact on fuel costs
With Cyprus heavily relying on heavy fuel oil for its energy production, the construction of Vasilikos LNG terminal is set to become a major breakthrough. The project is expected to reduce fuel costs and lower emissions, stabilizing Cyprus’s high electricity prices and ensuring a smooth transition towards renewable energy.
The Terminal, located at Vasilikos Energy Centre on the island’s southern coast, will consist of a floating storage and regasification unit (FSRU), port facilities, and pipelines connecting it to nearby power plants. The project has often been called a «game-changer» as it was designed to help Cyprus import and store liquefied natural gas (LNG) for electricity generation, limiting its unsustainable reliance on heavy fuel oil (HFO).
However, to this date the project is not fully operational. With construction works starting as early as 2020–2022, the project has later faced numerous challenges and delays, resulting in an undefined completion timeline.
The green transition: renewable energy (solar and wind)
In recent years, Cyprus has made a giant leap towards sustainability by increasing its renewable energy projects. In 2025 alone, the island has added around 122 MW of new solar capacity. Whilst in 2026, these figures have risen to a staggering 957 MW. With that in mind solar energy is expected to account to 20–22% of the total electricity generation this year. Currently, Cyprus is becoming one of the fastest growing solar energy markets in Europe with government incentives set to continue into 2026. Some of these incentives include:
- Cyprus debut initiative subsidising solar + battery systems
- Support for self-consumption model consumers
Thanks to these government reforms, electricity energy supply for households is expected to change with the growth of solar power.
Wind energy
With several wind farms dispersed throughout the island and the total wind capacity of 157 MW, wind energy is the second most important sustainable energy source in Cyprus. However, compared to solar energy, wind electricity accounts for a small but stable share of total renewable energy production.
The European connection: The Great Sea Interconnector project
Adopted by the European union as the «Project of EU Common Interest»,
The Great Sea Interconnector will connect Cyprus with Greece and Israel via a giant undersea cable.
With an estimated cost of approximately 2—2.5 billion euro, this ambitious project is set to achieve an initial capacity of 1,000 MW, projected to expand to 2,000 MW. The Great Sea Interconnector will feature one of the longest undersea cables in the world, stretching over 1,200 km at the depth of 3,000 meters under the sea level. Once completed, it will allow the energy flow in both directions, facilitating renewable exports, cheaper electricity imports and better renewable integration between mainland Europe and the Eastern Mediterranean region.
However, following the withdrawal of the original project’s developer — EuroAsia Interconnector Ltd in 2023, the completion timeline has been shifted towards 2028–2029.
The cost of carbon: EU emissions trading system (ETS) policies
The EU Emissions Trading System (ETS) is a policy which obligates powerplants and large industrial entities to buy emission allowances for every ton of CO2 they produce. Recently, the EU has further reinforced their ETS, as a part of a «Fit for 55» climate plan, aiming to reduce Europe’s carbon emissions by 55% by 2030.
Key changes include:
- Fewer carbon allowances available
- Higher prices
- Stronger incentives for renewable energy and electrification
With carbon emissions costs skyrocketing over the past few years, the policy has directly affected Cyprus and local consumers, driving the electricity prices up. Typically, the ETS costs are passed down onto the consumers through the fuel adjustment charge. On the upside, the stricter ETS policy is a primary driving force behind Cyprus’s recent renewable energy projects and initiatives.
Detailed electricity prices forecast for Cyprus in 2026
The projected price range
According to the official data sources, the electricity prices in Cyprus in 2026 will likely reach approximately 30 euro cents/kWh. This scenario is likely unless major energy projects, such as the Vasilikos Terminal, are completed, or renewable energy production replaces fuel-based electricity generation.
Optimistic, realistic and pessimistic scenarios
Optimistic Scenario
According to the government study, if the country's reliance on heavy fuel would fall, giving way to the use of natural gas and renewable energy sources, the estimated electricity costs could drop to 22—25 euro cents/kWh. However, this outcome would depend largely on the stability of global fuel prices as well as the completion of the Vasilikos Terminal and the expansion of solar energy infrastructure.
Realistic Scenario
Given the uncertainty behind the completion of the Great Sea Interconnector project and Vasilikos Terminal, it is projected that the electricity prices would remain within the latest official level of 30—31 euro cents/kWh. This is only achievable, however, if EU carbon costs stay close to last year’s levels and global fuel prices do not rise dramatically.
Pessimistic Scenario
If oil prices would see a dramatic spike and EU carbon costs would continue to rise, the electricity prices could increase to as high as 33—38 euro cents/kWh. This scenario may arise if ongoing tensions in the Middle East would push the oil prices up and renewable energy production in Cyprus will be insufficient to offset these costs.
Analysis: factors pushing prices up and down
Geopolitical and economic factors
With Cyprus’s energy production heavily reliant on imported fuel, the electricity costs are closely linked to global oil prices, making them extremely volatile and dependent on various geopolitical events, which can drive the electricity prices up.
Policy changes
Continued rise of the EU carbon emissions charges could significantly increase the island’s energy production costs.
Geographical
With an isolated energy grid, Cyprus faces limited energy import options and less flexibility when it comes to addressing supply shortages and price fluctuations.
Renewable energy production
Currently, the growing popularity of solar photovoltaic systems is helping reduce the country's dependence on fossil fuels. Continued expansion of renewable energy infrastructure would gradually lower the electricity prices.
Impact on an average household
According to official stats, the average Cypriot household consumes approximately 300 and 500 kWh per month. Given the average projected price of 28—32 euro cents/kWh, the median household could expect to pay around 85 to 160 euro per month for electricity. Alternatively, below is a more detailed breakdown of estimated electricity costs.
250 kWh — 75–80 euro p/month
350 kWh — 105–112 euro p/month
450 kWh — 135–144 euro p/month
600 kWh — 180–192 euro p/month
How to prepare and manage future electricity costs
For households: smart savings and investments
PV systems
One of the best ways to save up on your electricity bill is to install rooftop photovoltaic (PV) systems. The initial investment would eventually pay off by reducing grid dependency, lowering electricity bills and increasing the property value. In addition, a recently announced 35 million euro government support scheme for renewable energy with storage provides subsidies for home battery systems paired with solar.
Smart energy consumption
The experts also suggest using smart meters and energy monitoring apps to track electricity consumption in real time.
On top of that, these tactics can significantly lower energy consumption:
- Switching to LED lighting
- Using energy-efficient appliances (A++ or higher)
- Selecting «eco mode» on appliances (when available)
- Improving home insulation
- Installing smart thermostats
If you already have PV systems, it is recommended to shift the heavy electricity use to daytime when solar generation is strongest.
It is also a good idea to follow a Cyprus newsletter updates from the relevant energy bodies in order to keep up-to-date with the recent policies and initiatives.
And, of course, it is best to take advantage of the Mediterranean climate, by maximising the use of natural light and warmth during winter, and natural ventilation in summer to lower electricity use.
For businesses: optimising energy for profitability
When choosing the office building, it's important to pay attention to the energy rating — A-rated buildings can help maximize energy savings in the long-run. In addition, there are natural ways of improving building efficiency by enhancing insulation and leveraging natural ventilation and lighting.
Just like with residential users, it's recommended to invest in the installation of commercial PV systems.
It is highly beneficial to use energy efficient technology and appliances, such as LED lighting, efficient HVAC units and smart energy management systems.
Furthermore, there's a number of government subsidies available for businesses investing in renewable energy sources, such as PV battery storage installation scheme, and subsidies for energy efficiency building upgrades.
Frequently asked questions (FAQs)
Will energy prices in Cyprus definitely rise by 2027?
Since the Cypriot electricity market remains extremely volatile, it is not yet clear if the energy prices will rise significantly by 2027. However, there is a strong indication that they might remain at the current projected level of 31 euro cents/kWh or slightly higher. This projection can vary depending on the geopolitical situation, global fuel prices and the Cypriot government’s efforts in leveraging autonomous energy sources.
What's the single most effective thing I can do to reduce my electricity bill?
In 2026, installing rooftop photovoltaic solar panels (PVs) remains the most effective long-term energy saving tactic.
How do Cyprus's projected prices compare to other Mediterranean EU countries?
Cyprus’s electricity costs continue to be amongst the highest in Europe. According to recent European Commission data, Cyprus households are projected to pay around 31 euro cents/kWh, compared to the European average of roughly 25 euro cents/kWh.
Are there any new government initiatives planned for 2026—2027?
In 2026 and beyond Cyprus government will continue implementing and expanding the national renewable energy framework. Introducing energy storage subsidies, increasing solar and wind capacity and market liberalisation are some of the government tactics aimed at reducing electricity costs.
Future outlook: Cyprus' energy trajectory beyond 2026
Looking ahead, Cyprus’s energy prices will largely depend on the successful implementation of the government policies.
Recent news Cyprus reports suggest that continued energy reforms and investment in solar and energy storage could gradually stabilise electricity costs. At the same time, some news electricity updates continue to highlight the urgency of reducing dependence on imported fuels whilst strengthening the island's transition to a more sustainable energy framework.