A report released on Thursday by the audit office examined the rapid expansion of solar power grids and its inability to reduce electricity bills, instead consolidating profits in the hands of a small group of private companies while consumers absorbed rising costs.

The report examined the conduct of the electricity authority (EAC), the energy regulatory authority (Cera) and the energy ministry, concluding that regulatory choices favoured market competition over consumer benefit.

The dossier’s focus regards the limited role allowed to the state-funded EAC in developing renewable energy sources, particularly large-scale solar panel systems.

According to the audit office, between 2020 and 2024, the bulk of new renewable electricity capacity was granted to private investors.

Around 420 megawatts of solar and wind farms, excluding rooftop systems, are now operated exclusively by private entities, compared with just 20 megawatts owned by the EAC.

Five major investors alone account for roughly two thirds of that private capacity.

“The significant delay in the integration of renewable energy projects into the EAC’s production capacity has given private companies an advantage,” the report states, adding that “to date, the consumer has not benefited from the entry of these companies into the market”.

Instead, households were burdened with higher costs, including the purchase of greenhouse gas emission allowances, which totalled €955m between 2020 and 2024 and were passed directly on to bills.

Auditor-general Andreas Papaconstantinou was explicit in the policy’s failure, writing that “in practice, the insufficient presence of renewable enrergy in the EAC’s production resulted in the end consumer losing any potential benefits”.

Competition, he stressed, “is not an end in itself”, but a means to ensure “affordable, transparent prices” for consumers.

The report highlights a recent global collapse in solar energy costs as a missed opportunity.

Citing a 2025 study by the international renewable energy agency, it points out that the average global cost of energy for large-scale solar fell by about 90 per cent between 2010 and 2024.

“Despite this drastic reduction,” the report states, “it has not been possible to exploit it in Cyprus in a way that yields tangible and measurable benefits to the consumer”.

The regulator itself is criticised for prioritising the expansion of private capacity and restricting the EAC’s participation in renewables in order to stimulate competition.

Correspondence shows that between 2019 and 2022, the EAC was asked to pause renewable development while the regulatory framework was reviewed.

A draft decision in 2022 even signalled an intention not to grant further licences to the authority.

Cera rejects the accusation that it blocked projects, arguing that it acted to prevent abuse of market power and to create conditions for an effective wholesale electricity market.

“Cera must take preventive measures,” it asserted, including limits on the installed capacity in which the EAC can participate, to safeguard competition.

At the same time, the audit office faults previous EAC boards for failing to react “promptly and effectively” as private investors moved quickly to secure land and permits.

Much of the suitable land for solar farms is now under the auspices of private interests.

Some licence holders have not built their projects and are seeking millions of euros from the EAC to transfer permits which originally cost only tens of thousands.

The audit office called on Cera to cancel unused licences and reassign them to the EAC or other investors where the law allows.

Beyond renewables, the report decries the structural weakness across the electricity sector.

Fuels and emission rights account for about 70 per cent of the EAC’s operating expenses.

Delays in the arrival of natural gas, the absence of electricity storage, and ageing conventional plants at Vasiliko and Dhekelia add to costs and environmental risk.

As of the second half of 2024, Cyprus ranked second highest in electricity prices relative to purchasing power, according to Eurostat.

The audit also uncovers governance and operational failings, from heavy reliance on negotiated tenders to unanswered customer service calls and weaknesses in internal controls.

The prolonged lack of cooperation between regulator and utility, Papaconstantinou concludes “has worked to the benefit of private interests active in the development of renewable energy projects and to the detriment of the end consumer.”