Executive Summary

Cyprus has emerged as one of Europe's premier destinations for solar farm investments, offering a unique combination of exceptional solar irradiation, stable regulatory framework, and attractive returns. This guide provides institutional and high-net-worth investors with comprehensive insights into the Cyprus solar market.

1. Cyprus Solar Market Overview

1.1 Market Fundamentals

Cyprus offers exceptional conditions for solar energy generation:

1.2 Current Market Dynamics

The Curtailment Challenge (2025 Critical Trend):

Cyprus solar curtailment has increased dramatically from 0% (2021) to 45.8% (2025) in operational parks. This trend fundamentally changes investment economics and makes Battery Energy Storage Systems (BESS) increasingly essential for ROI protection.

2. Investment Costs & Pricing

2.1 Current Market Pricing (2025)

Based on actual market transactions and Lighthief Cyprus project data:

2.2 Typical Investment Sizes

2.3 BESS Addition Costs

Battery Energy Storage Systems for curtailment mitigation:

• €140,000 per MWh installed and ready (Tier-1 equipment)
• Optimal sizing: 0.5-1.0 MWh per MW for curtailment arbitrage
• Example: 5MW park + 12.5MWh BESS = €7.5M + €1.75M = €9.25M total
• BESS ROI: 15-20% standalone on energy recovery

3. Financing Options

3.1 Solar-Only Financing

Typical Terms:

• Interest Rate: 4.5-5.0%
• Loan Term: 12-15 years
• Maximum LTV: Varies by MW (€500k/MW cap)
• Minimum Equity: Total cost minus €500k/MW

Example - 5MW Park (€7.5M):

• Maximum Debt: €2,500,000 (€500k × 5MW)
• Minimum Equity: €5,000,000
• Equity %: 67%

3.2 Solar + BESS Financing

Enhanced Terms:

• Maximum LTV: 70% of total capex (solar + BESS)
• Interest Rate: 4.5-5.0% (similar to solar-only)
• Loan Term: 15 years
• Improved bankability from BESS revenue

Example - 5MW + 12.5MWh BESS (€9.25M):

• Maximum Debt: €6,475,000 (70% of €9.25M)
• Minimum Equity: €2,775,000 (30%)
• Lower equity requirement vs solar-only
• Enhanced ROI from BESS revenue

4. Revenue & Returns

4.1 Energy Production

Typical Performance Metrics:

• Capacity Factor: 20-22% (Cyprus average)
• kWh per kWp: 1,800-2,100 annually
• Degradation: 0.5% per year (Tier-1 panels)
• Performance Ratio: 80-85% system efficiency

4.2 Revenue Streams

Primary Revenue - Energy Sales:

• PPA Rates: €180-€210 per MWh (2025 market)
• Offtakers: EAC (utility) or private distributors
• Term: Typically 20-25 years
• Escalation: Often tied to inflation or fixed increases

Additional Revenue (with BESS):

• Night Tariff Premium: 20-30% higher than day rates
• Curtailment Recovery: 30-60% of curtailed energy monetized
• Grid Services: Potential ancillary service revenue (future)

4.3 Return Expectations

ROI Scenarios (5MW Park Example):

5. Investment Process

5.1 Step-by-Step Timeline

Phase 1: Initial Assessment (Weeks 1-2)

1. Initial consultation with Lighthief Cyprus team
2. Review available projects and opportunities
3. Preliminary financial modeling
4. Site visit arrangements (if applicable)

Phase 2: Due Diligence (Weeks 3-6)

1. Execute Non-Disclosure Agreement (NDA)
2. Receive complete due diligence package:
   • Technical specifications and equipment details
   • Financial projections and historical data (if operational)
   • Legal documentation (permits, licenses, land rights)
   • Grid connection agreements
   • PPA or offtake agreements
3. Independent technical review (if desired)
4. Legal review of all contracts
5. Site inspection and verification

Phase 3: Structuring & Negotiation (Weeks 7-10)

1. Finalize investment structure (equity, debt, hybrid)
2. Engage banking partners for financing (if applicable)
3. Negotiate final terms and pricing
4. Draft and review Share Purchase Agreement (SPA)
5. Arrange insurance and warranties

Phase 4: Execution (Weeks 11-14)

1. Execute definitive agreements
2. Complete legal formalities and registrations
3. Transfer funds and close transaction
4. Transition operations to investor/operator
5. Establish O&M contracts (if not already in place)

5.2 Required Documentation

From Investor:

• Proof of funds or financing pre-approval
• Corporate documents (if entity investor)
• ID/passport copies
• Tax residency certificates
• Bank references

From Seller/Developer:

• Company registration documents
• Land ownership or lease agreements
• Environmental permits and approvals
• Grid connection agreements
• Equipment specifications and warranties
• As-built drawings (if operational)
• Historical production data (if operational)

6. Risk Factors & Mitigation

6.1 Key Risks

1. Curtailment Risk (CRITICAL)

• Issue: Grid operator may curtail production during oversupply
• Current Status: 45.8% average curtailment in 2025
• Mitigation: BESS integration to recover 30-60% of curtailed energy
• Cost: €140,000/MWh for Tier-1 battery systems

2. Regulatory & Policy Risk

• Issue: Changes in feed-in tariffs or support mechanisms
• Mitigation: Long-term PPAs, grandfathering provisions, EU framework stability

3. Performance Risk

• Issue: Lower than projected energy yield
• Mitigation: Conservative projections, performance guarantees, insurance

4. Equipment & O&M Risk

• Issue: Equipment failures, maintenance costs
• Mitigation: Tier-1 equipment with warranties, professional O&M from Lighthief Cyprus, spare parts inventory

6.2 Risk Mitigation Strategies

7. Tax Considerations

7.1 Cyprus Tax Framework

Corporate Tax:

• Rate: 12.5% on corporate profits
• Among lowest in EU
• No withholding tax on dividends to non-Cyprus tax residents

Capital Gains Tax:

• Generally exempt for securities and shares
• Special provisions for energy projects

Crypto Investors Special Note:

7.2 Tax Optimization Structures

Common structures for international investors:

• Cyprus holding company structure
• Partnership with EU investors
• Direct ownership with tax treaty benefits

Consult with qualified tax advisors for your specific situation.

8. Why Lighthief Cyprus

8.1 Local Expertise Since 2017

Lighthief Cyprus Ltd evolved from solar panel recycling pioneers to full-service EPC contractor with deep local knowledge:

• Founded: 2017 (Recycling), expanded to full EPC
• Location: Limassol, Cyprus (local presence)
• Specialization: Residential to large-scale solar + BESS integration
• Unique advantage: Recycling heritage ensures lifecycle expertise

8.2 BESS Expertise

Official Tier-1 BESS Reseller:

• Tesla Energy Solutions
• BYD Battery-Box Commercial
• Huawei LUNA Series
• Sungrow PowerStack

Local Cyprus Advantages:

• 24/7 monitoring from Limassol headquarters
• Same-day response for emergencies
• Strategic spare parts inventory in Cyprus
• EU warranty backing with local enforcement

8.3 Complete Service Portfolio

• EPC Services: €500-600k/MW for complete development
• O&M Services: 24/7 monitoring, preventive maintenance, performance optimization
• BESS Integration: Design, procurement, installation, commissioning
• Asset Optimization: Performance enhancement for existing parks
• Lifecycle Support: From development through decommissioning/recycling

9. Next Steps

9.1 Immediate Actions

1. Review Current Opportunities:
   • PARK-REF-5001: 5.01MW with tracking - €9.6M
   • Additional projects available upon NDA
2. Schedule Consultation:
   • Alexander Papacosta, Business Development Manager
   • WhatsApp: +357 99 164 158
   • Email: lighthiefcyprus@gmail.com
   • Calendly: https://calendly.com/lighthiefcyprus
3. Use Online Tools:
   • ROI Calculator: https://solarfarms.cy/calculator
   • LOI Generator: https://solarfarms.cy/loi
   • Project Listings: https://solarfarms.cy/projects

9.2 Questions to Consider

• What is your target investment size (1MW, 5MW, 10MW+)?
• Do you prefer operational parks or development projects?
• What is your target ROI and acceptable payback period?
• Will you require bank financing?
• Is BESS integration important for curtailment protection?
• Do you want hands-on involvement or passive investment?