Land, grid, planning and licensing: the order in which a Cyprus solar project has to be assembled, and where developers most often lose time.
Land Rights Come First, but Not Unconditionally
Before anything else, the developer needs a right to use the site that lasts as long as the project and survives a change of owner.
The usual routes are purchase, a long lease, or a right in the nature of an easement. Whichever is used, the questions to answer before signing are the same: is the title clean, are there encumbrances or existing rights of way, does the planning zone permit the use, and is the term long enough to cover the operating life plus decommissioning.
The mistake we see is committing to the land, at full price, before knowing whether the grid can take the output. An option or a conditional agreement, with a defined period to complete the technical and regulatory work, costs a fraction and preserves the ability to walk away.
Which licensing tier the project falls into
Before the sequence, the threshold. The Regulating the Electricity Market Law of 2021, Law 130(I)/2021, puts three regimes in front of a generator, and the installed capacity decides which one applies.
Section 26(1) is the default: no person may build a generating station or generate electricity, or install or operate an electricity storage installation, without a licence from CERA. Storage operating exclusively for own use is excepted.
Section 27(1) replaces the licence with a general licence, taken up by notification rather than by application, for generation from stations not connected to the transmission or distribution system; generation up to 20kW; generation for own use up to 30kW; generation from renewable sources up to 50kW; and small-scale high-efficiency combined heat and power. A proviso closes the obvious route round it: connecting a previously unconnected installation to the network changes the activity and the process starts again.
Section 27(4)(a) sits between the two. CERA may grant an exemption from the licence requirement for generation for own use above 30kW and up to 1MW, and for renewable generation above 50kW and up to 8MW. Above 8MW there is no exemption route and section 26 applies.
Section 27(3) supplies the clock for the general licence: CERA has one month from receipt of the notification form to assess it and ask for corrections, and the general licence takes effect one month after receipt if it has not.
And section 25(1) is the one that catches programmes: a CERA licence is required and any other licence, approval or opinion required by any other law. Section 25(2) names what those other authorities weigh, including land use and siting. A project cleared by CERA and not by planning is not a project that can be built.
Licences and Approvals
The two statutes behind this stage are the same ones that govern the finished installation. Section 38(1) of the Promotion and Encouragement of the Use of Renewable Energy Sources Law, Law 107(I)/2022, gives consumers the right to act as renewable self-consumers, individually or through aggregators, and sections 9 and 122 of the Electricity Market Regulation Laws, Law 130(I)/2021, give the regulator the power to put that into effect. Which permissions a particular project needs, and in what order, follows from the scale and the connection point rather than from either statute alone, which is why the sequence below matters more than any single licence.
Renewable projects such as solar and wind typically require a combination of licences, planning and environmental approvals, and a grid connection agreement. What exactly is required depends on the technology, the installed capacity and the location.
Two points matter commercially. First, these approvals arrive with conditions attached, and the conditions are part of the project: they can dictate construction hours, access arrangements, environmental monitoring or restoration obligations. Second, they arrive on a timetable that is not yours, which is why contractual deadlines should be tied to the grant of approvals rather than to calendar dates.
A licence that is running out can be extended, but only on conditions that were written down in 2026. Section 32(2) of Law 130(I)/2021, added by Law 70(I)/2026, allows CERA by reasoned decision to extend the validity of a licence or an exemption for the construction of a generating station or an energy storage installation, provided the request is accompanied by the documents that justify it and account for the delay, that CERA is satisfied both that the holder's conduct supports a genuine intention to build and that the holder has the technical, economic and financial capacity to do so, that the applicant has gone to the Single Point of Service under section 18(1) of Law 107(I)/2022, and that the applicant has produced a certificate from the relevant operator confirming a connection application, its date and the stage it has reached.
On a second or later request CERA may extend again only against proof of funds. No single extension may exceed one year and the extensions together may not exceed five years, and the decision is published and notified to every applicant whose own licence or exemption request is pending. The effect is that a stalled project cannot sit on a licence indefinitely, and that the competitors waiting behind it are told when it is given more time.
Storage, and a data centre, without a second planning permit
Battery storage next to a solar farm no longer needs its own planning permit, and neither does a data centre on the same site. Law 179(I)/2025 added a further proviso to section 3 of the Town and Country Planning Law, 90/1972, which deems the planning permit that section otherwise requires to have been issued in two cases.
The first is the installation or operation of an electricity storage installation in combination with a renewable energy generating station for which the licences required under the relevant legislation have already been obtained. Note the condition: the licences for the generating station have to be in hand first. The deeming provision attaches storage to a project that is already lawful; it does not licence a project that is not.
The second is the installation of a data centre, as that term is defined in section 2 of the Energy Efficiency Law, at the generating station described above, provided the conditions set out in an order of the Minister made under section 22 are met. The proviso then adds a restriction on the Minister rather than on the developer: those conditions may not specify a maximum area for the installation. A data centre co-located with generation is not to be capped by floor space through the planning door.
What this changes in practice is sequencing. Storage and a co-located data centre used to sit in the planning queue behind the generation project; they now follow it as of right, on the terms above. Everything else on this page still applies: the deeming provision reaches the planning permit under section 3, and not the building permit, the CERA licences, the grid connection or the environmental approvals.
Grid Connection: The Constraint That Decides Viability
Generation without connection has no value. The connection terms determine the capacity that can actually be exported, the point of connection, the cost of reinforcement works, and the timetable.
Grid capacity in a given area is finite and allocated. A site that is perfect in every other respect can be worth nothing if the local network cannot accept its output, or if it can only accept it after works whose cost exceeds the project's margin.
This is why the grid question belongs at the start of the diligence, not at the end of it.
Since April 2026 the allocation follows a statutory rule, and the rule rewards projects that are ready. Section 95A of Law 130(I)/2021, inserted by Law 70(I)/2026 and in force from 14 April 2026, provides that the Transmission System Operator and the Distribution System Operator must ensure that no electrical space is reserved on either system unless all the licences or approvals required for the connection, under that Law or under any other relevant legislation, have already been secured. A proviso applies the same rule to flexible connection agreements, which closes the route of holding capacity through the flexible route while the consents are still outstanding.
Among the projects that qualify, order is decided by maturity. Section 95A(2) requires both operators to apply a priority order based on maturity criteria published by notification of the Minister, so that the projects connected are the ones ready to connect and to operate. The criteria may take account of the date on which all the required licences were secured, and they may give priority to generating stations combined with energy storage. They are consulted on with CERA and with whichever operator is concerned. Once subsections (1) and (2) are satisfied, section 95A(3) requires the system owners to proceed with the connection immediately and without delay.
The commercial consequence is that preliminary connection terms are not a place in the queue. Law 70(I)/2026 added a definition of the term to section 2 which says expressly that the document does not create a load reservation on the distribution or the transmission system: it is a preliminary technical solution and an estimate of the charge under the connection charging policy approved by CERA. The binding document is the connection offer, defined in the same amendment as the operator's final offer for the connection of the whole installation, containing the terms and the charge. A project underwritten on the strength of preliminary terms is underwritten on a document the statute says reserves nothing.
Terms already issued are being looked at again. Section 95A(4) requires CERA to re-examine the preliminary connection terms issued for generating stations or energy storage installations before the 2026 amending Law came into force, which puts every set of terms predating 14 April 2026 into that exercise.
The queue itself is no longer invisible. Section 48(3)(a)(iii) requires the Distribution System Operator to publish the priority order, per transmission substation, of approved and pending distribution connection requests for renewable generating stations or storage installations, stated separately for capacity up to 120kW and above 120kW. Section 70(9) requires the Transmission System Operator to publish the equivalent order for the transmission system and to update it quarterly. Before a site is committed to, that is a published document to read rather than a question to ask.
A refusal now has to be explained. Section 48(3A)(c) requires the Distribution System Operator to justify its decision on a documented study where it refuses the connection applied for, or where it issues connection terms for permanent zero export. Zero export terms are the softer form of refusal, because they leave the installation built and the export revenue unavailable, and they now carry the same obligation to show the working.
Curtailment has acquired a published order of its own. The provisos added to section 47 and to section 70(1)(l) allow each operator, where curtailment is necessary to keep the system secure and reliable, to follow an order of curtailment fixed on impartial and equal criteria that take account of system security, reliability and efficiency and, where feasible, of the cost to the Renewable Energy Sources and Energy Saving Fund and the cost of greenhouse gas emissions. The criteria are submitted jointly by the two operators, approved by CERA, and posted on the operator's website. An operator that curtails must tell the affected users and give the reasons, and must avoid any conflict of interest in deciding. For a project whose model depends on export hours, the criteria are worth reading before the first curtailment rather than after it.
If you are assembling a solar project, tell us the installed capacity and where the grid connection stands before you commit to the land, at office@kleanthousplatis.com, or the enquiry form. We reply within one business day.
The Power Purchase Agreement
A power purchase agreement is a long-term contract for the sale and purchase of electricity between the generator and the buyer. It is the document that makes a project bankable, because it converts an uncertain merchant revenue into a contracted stream a lender can model.
The provisions that decide who bears the risk are:
- Term and price. Fixed, indexed, or floor-and-collar, and what happens if market prices move sharply either way.
- Volume commitment. Whether the buyer takes what is produced, or a defined quantity, and what happens to the difference.
- Curtailment. Who bears the loss when the network operator instructs a reduction in output.
- Change in law. Which party absorbs the cost of regulatory change over a term measured in decades.
- Credit support. What stands behind the buyer's obligation, and what happens if the buyer's covenant deteriorates.
- Termination and its consequences. Including whether termination payments are sufficient to repay project debt.
Curtailment and change in law are the two most frequently underestimated. Both are low-probability in any single year and material over a twenty-year term.
Construction and the EPC Contract
The construction contract should align with the PPA rather than sit beside it. Where the PPA imposes a commercial operation date with consequences for delay, and the EPC contract carries a different date or weaker remedies, the developer absorbs the gap.
The same alignment applies to performance: if the PPA assumes output that the equipment warranties do not underwrite, the shortfall is the developer's.
Where Disputes Arise
In our experience energy disputes cluster in four places: delay to the commercial operation date and who caused it, output falling short of the modelled figures, curtailment losses and who bears them, and change-in-law claims where a regulatory shift alters the economics.
Most of these are decided by contract wording drafted years earlier, which is the strongest argument for spending time on the documents while relations are good.
Frequently Asked Questions
Does my project need a CERA licence?
It depends on capacity. Section 27(1) of Law 130(I)/2021 puts generation up to 20kW, generation for own use up to 30kW, and renewable generation up to 50kW under a general licence taken up by notification. Section 27(4)(a) allows CERA to grant an exemption for own use above 30kW to 1MW and for renewables above 50kW to 8MW. Above 8MW a licence under section 26 is required.
How long does the general licence take?
One month. Section 27(3)(a) allows a person meeting the conditions to carry on the activity on submitting the notification form; section 27(3)(b) gives CERA one month from receipt to assess it and ask in writing for corrections or further information; and section 27(3)(c) provides that the general licence takes effect one month after CERA received the form, provided it has not acted. Where it has, the licence takes effect when CERA is satisfied enough has been supplied.
Does a CERA licence let me build?
No. Section 25(1) requires a licence from CERA under sections 26 and 27 and, separately, any other licence, approval or opinion required by any other law. Section 25(2) names what the other authorities weigh: public health and safety, the environment, land use and siting, the use of public land, and the contribution of the capacity to reducing emissions. Clearing CERA and not planning leaves a project that cannot be built.
What permits are needed for a renewable project in Cyprus?
Typically a combination of licences, planning and environmental approvals, and a grid connection agreement. The exact requirements depend on the technology, the size of the installation and its location.
Should I secure the land before or after the grid position is known?
Where possible, secure an option or a conditional agreement first. Committing fully to a site before the grid position is understood is the most common and most expensive sequencing error.
What makes a PPA bankable?
A term long enough to repay the debt, a creditworthy buyer or adequate credit support, a clear allocation of curtailment and change-in-law risk, and termination provisions that do not leave the lender short.
Do you advise on oil, gas and offshore matters as well?
Yes. We advise on conventional and offshore projects including contracts, licensing, joint ventures and regulatory compliance.
Related Reading
By Klitos Platis, Advocate. Klitos advises on litigation, corporate and commercial law, real estate, construction and energy at Kleanthous & Platis LLC in Nicosia.
This article is for general information only and does not constitute legal advice. Laws and their application can change, and individual circumstances differ. For advice on your own matter, contact Klitos Platis at klitos@kleanthousplatis.com or telephone +357 22 680 330.
Klitos Platis
Advocate, Partner
Kleanthous & Platis LLC, Nicosia · Published 16 February 2026
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