Since the regulation was published in Israel in July 2008 regarding the generation of solar electricity, businesses to install roof top solar technology have budded. The method behind the concept is as follows: energy companies publish a “roof requested” notice and then they install the facility on the roofs of the owners of the premises such as petrol stations, malls, industrial plants, etc. using three different kinds of business models. The first model is to rent the roof and the payment of a monthly fee for using it, so that the entity that gains from the electricity generation is the energy company rather than the roof top owner. In the second model, the company only sells and installs the solar equipment and the roof owner enjoys any gains from the sale of electricity. The third model is a hybrid of the first two whereas the energy company and the roof owner jointly benefit from the gains of the sale of electricity. Based on a result carried out by Calcalist in December 2009, this solar trend has certain financial disadvantages, such as: (1) tax burden – any income from industrial solar generation facilities larger than 4 KW are bound by the regular tax regulations so that income could be taxed up to 44%. (2) In addition, no system works 100% of the time at 100% efficient, but rather at a maximum efficiency of 95%-98%, due to maintenance needs, break-downs, dirty panels, or even shade passing momentarily over one small part of the system is sufficient to significantly decrease its production efficiency by dozens of percentage points. (3) Every 8 years (life span is between 5-10 years) it is necessary to change the converter at a cost of at least 120 thousand shekels. (4) The need to take on long term financial obligations – many times the facility is financed with prime linked loans. With such long term loans, the prime could increase significantly. In addition, the equipment is likely to lose 5% of its income value each year. One also needs to take into account the risks involved in undertaking 20 year financial obligations, such as if one wants to sell the property, change the purpose of the land/property, possible theft or breakage of the system or damage caused by weather (such as thunder and storms). (5) Insurance/guarantees are not included in the purchase price – although the energy companies offer a guarantee for the installation of the facility, this guarantee is far from all encompassing. In fact, profits are due to stream in as of year 8 of the installation and continue under the best circumstances for 20 years. However, no guarantee will be worth anything, if the energy company or the manufacturer of the equipment encounters financial difficulties and does not outlast the 20 year term
