A reported decision to stop accepting new net-metering connections by Egypt’s Electricity Utility and Consumer Protection Regulatory Agency, EgyptERA, prompted widespread concern among solar-energy businesses. Net metering allows a customer generating solar electricity to export surplus to the grid and offset electricity drawn from it at other times, supporting decentralised renewable generation.
Industry representatives feared damage to approximately 168 companies accredited by the New and Renewable Energy Authority, as well as jobs and green investment. As of the Arabic report’s publication on 20 December 2025, interviewees said the proposed halt was due on 31 December but had not been explained through a clear published decision or technical assessment.
The regulator’s public notice confirms continued receipt of applications until 31 December 2025 while technical and legislative rules are reviewed. That notice alone does not establish a permanent nationwide ban or cancellation of existing contracts. The uncertainty described below concerns new projects and the lack of a clearly communicated replacement framework at the time of reporting.
Developers asked why a working mechanism should be stopped before its replacement was ready, particularly while equipment costs were falling.
Critics consider the proposed change inconsistent with Egypt Vision 2030, its integrated sustainable energy strategy and the 2050 climate strategy. They argue it could waste available small-scale solar output and undermine the 2025 policy target of 42% renewable capacity by 2030.
Ayman Heiba, head of the Cairo Chamber of Commerce’s sustainable-energy division and the Sustainable Energy Development Association (SEDA), warned that ending offsets could increase some projects’ payback periods from five years to more than ten. He predicted weaker economic viability, higher factory costs and pressure on exports needing to reduce their carbon footprint.
The Arab Network for Environment and Development (RAED) called for reconsideration and dialogue with the ministry and regulator. The chamber’s division prepared a detailed memorandum seeking an urgent meeting to discuss investment consequences.
It argues that small and medium solar installations can lower fuel-subsidy requirements, reduce foreign-currency pressure and support the grid. A mismatch between sunlight and factory operating hours makes netting valuable. It also links clean energy to export competitiveness under the EU Carbon Border Adjustment Mechanism, which applies to specified covered products rather than all exports indiscriminately.
Hatem El-Roumi, the division’s first deputy, expects direct losses to the 168 solar companies and broader damage to industrial and agricultural investors, particularly small and medium factories relying on solar electricity to contain costs.
He says rising electricity prices had encouraged factories to adopt grid-connected solar systems instead of closing or cutting production. He questions the timing amid lower module prices and an exchange rate cited at approximately EGP 47.5 per US dollar in the original reporting. Those conditions, he argues, offered a chance to revitalise investment.
“Companies are already paralysed. Applications received no answer, then firms were told the system would stop,” he tells Zawia3. He believes thousands of factories could miss the opportunity to install cheaper systems while electricity tariffs continue rising.
El-Roumi estimates installation costs fell 30–40%, shortening some payback periods from about eight to four years. He warns that between 2,000 and 3,000 factories need solar installations and that industrial, agricultural and commercial losses could exceed those of the installers themselves. These are his estimates, not an independently measured projection of closures.
He says the change would not be retrospective: existing household and factory connections would continue, while new applications were the concern.
He contrasts roughly 300 MW of small and medium installations with central projects of around 3,000 MW. Distributed systems, in his view, are more manageable because they are geographically dispersed. That is his technical assessment; network impacts depend on location, equipment, controls and system design.
Generating at the point of consumption can reduce the need for major transformer and voltage-conversion investments, he says. He cites national installed capacity around 60 GW and a peak-demand estimate of 36 GW, arguing that aggregate spare capacity is not sufficient justification for ending net metering. Installed capacity and peak demand are different measures and do not by themselves establish local grid-connection capability.
He acknowledges that the arrangement makes the grid function like a financial “battery”: customers export in daylight and offset imports later. It does not physically store that customer’s electricity. Technical effects require study and rules, he says, such as storage obligations for larger systems, rather than wholesale abolition.
Solar and renewable capacity cited in the original report
| Measure | Reported value | Reference period |
|---|---|---|
| Installed solar capacity | About 2.59 GW | End of 2024 |
| Total renewable capacity | About 8.6 GW | End of FY 2024/2025 |
| Wind capacity | 3.034 GW | FY 2024/2025 breakdown |
| Solar and biomass combined | About 2.8 GW | FY 2024/2025 breakdown |
| Hydropower | About 2.8 GW | FY 2024/2025 breakdown |
The end-2024 figures cited solar at about 33.4% of renewable capacity for that dataset. The later fiscal-year breakdown uses a different period and includes biomass with solar, so the share should not be applied directly to its 8.6 GW total. The article also cites a solar target of 8.5 GW by 2030 and a market forecast from 2,300 MW in 2023 to more than 3,500 MW in 2028. A market forecast is not a government target.
Uncertainty over the replacement system
Mohamed El-Sobki, energy-engineering professor and former head of the renewable-energy authority, says the mechanism remained available until 31 December. He criticises announcing its end without clear reasons or a replacement developed in advance. Verbal references to modernisation, he argues, are insufficient.
The existing arrangement should continue until changes are ready, or development should proceed without setting an expiry date first, he says. Net metering supplies electricity close to loads, reduces distribution losses and can defer network reinforcement.
Its economic benefits extend beyond panel suppliers and installers to factories making components such as mounting structures. Businesses specialising in this field would be especially exposed.
“Projects already operating under net metering will retain their contracts,” El-Sobki says. His concern is the uncertainty facing future investors.
He supports demands for a clear alternative and scientific consultation involving distributors, developers, investors and end users. He sees no current voltage or stability problem at the limited scale in question and believes serious dialogue could prevent avoidable consequences.
Hafez El-Salmawy, professor at Zagazig University and former EgyptERA chief executive, sees no objective justification for a halt. More solar generation can displace imported gas and relieve pressure on foreign currency, he says.
Small and medium net-metering projects are typically built by businesses the state says it supports. He considers them relatively simple, with substantial local components compared with major installations.
Self-generation reduces customers’ reliance on distribution networks, he argues, potentially allowing existing infrastructure to serve more users while meeting environmental objectives.
Such projects generally rely on domestic finance, without the sovereign guarantees or foreign-currency payment commitments often required by major projects, he says.
He describes Egypt’s mechanism as among the narrowest internationally, contributing to limited installed capacity. Broader arrangements could accelerate implementation.
A decision should be formally published and accompanied by reasons, he argues. Unexplained or unpublished changes harm the wider investment climate, not just solar companies. He also cites around 18 circulars on net metering, some of which he considers contradictory, adding to uncertainty.
El-Salmawy calls for a comprehensive review setting out the national objective, appropriate mechanisms and investment incentives. Meaningful debate requires a clear, reasoned official decision.
Would batteries solve the problem?
Wael El-Nashar, head of Onera solar-energy company, describes the proposed halt as unwise. Integrating generation from multiple sources can reduce the state’s need for new plants and improve efficiency, he says.
He notes that the state itself develops major solar projects feeding the grid, while small producers could also contribute. However, he considers it possible that current network limitations motivated the decision amid many simultaneous injections. This is his explanation, not a disclosed official technical finding.
He favours smart-grid information systems and advanced controls to manage flows. Ending new two-way arrangements would leave affected consumers taking grid electricity without exporting surplus, he says.
He believes the change may be temporary while the network develops, citing renewable expansion plans through 2030. Other interviewees disagree about its duration.
El-Nashar advises households and small installations to consider storage, saying batteries have become more accessible for retaining daylight surplus and using it after sunset.
Technical solar specialist Mohamed Shiha sees customers, rather than installers, as the main losers. Companies usually design systems around actual consumption. Without netting, clients cannot benefit from surplus to the same extent.
Offsets had reduced electricity bills and accelerated cost recovery, he explains. Losing that benefit affects a customer’s economics even if the installing business still delivers a functioning system.
For factories, batteries are expensive. He says some designs may require substantially more generating capacity to charge storage, alongside costly lithium batteries with an estimated ten- to twelve-year life.
Shiha gives an example of storing 100 kWh over a day and estimates that battery units costing around EGP 150,000 each could make a project much more expensive. The original does not specify unit capacity or a complete design, so it cannot support a reliable calculation of how many batteries a 100 kWh requirement would need. Kilowatt-hours measure energy, not power.
He estimates average payback near five years for conventional solar installations, with panels potentially lasting 30 years and warranties extending to 25. Subsequent electricity is not literally cost-free: maintenance and possible equipment replacement remain.
Maintenance costs are relatively limited, often involving inverters, he says. Factories operating day and night benefit particularly from grid offsets, whereas a household may sometimes use a smaller battery system, although that too can be costly.
Shiha believes some objections come from users treating solar installations as investments in surplus generation, rather than a direct threat to installers. His assessment differs from industry representatives predicting major company losses.
A parliamentary demand for answers
Mahmoud Essam Moussa, Reform and Development Party MP, submitted an urgent parliamentary question to Prime Minister Mostafa Madbouly and the electricity minister on 13 December. He warned of damage to confidence and national investments.
Zawia3 reviewed a copy of his question. It says factory owners received notices about ending the existing mechanism for offsetting solar output against grid consumption, an arrangement he says reduced some operating costs by up to 70%.
Moussa tells Zawia3 that regulator chairman Mohamed Moussa Omran confirmed a halt from 31 December based on an internal decision not clearly published at the time. He says the chairman cited solar electricity’s effect on grid frequency, while Moussa countered that its share was only around 4% and requested a documented technical study.
No study was supplied in that exchange, Moussa says. He did not understand the decision as temporary because no defined development period was communicated. By contrast, El-Nashar anticipates a temporary change; neither interpretation alone establishes the final regulatory position.
Moussa says existing connections would not be affected retrospectively, and applicants who had already obtained approvals would be permitted to complete installation.
The dispute places decentralised solar at a crossroads between grid-management concerns and investment, industrial and environmental goals. Interviewees’ central demand is for published technical evidence, a transparent framework and a workable alternative. Protecting the grid and encouraging clean generation require an explained transition rather than uncertainty over new applications.
