GAZA CITY, Gaza Strip — The National Economy Ministry in Gaza announced on May 27 that it was lifting all fees, import taxes and customs duties on equipment for generating electricity, including solar power systems. This decision comes as the electricity crisis in the enclave reaches a new plateau, with Gaza’s only power station unable to operate at full capacity amid the political dispute between the Palestinian Authority (PA) in Ramallah and Hamas in Gaza.

The situation has recently worsened, with Israel agreeing on June 12 to a PA request to scale back its power supply to Gaza, reducing the average of four hours of electricity a day by 45 minutes. Some private companies have begun turning to solar energy systems, but few residents are able to use them in their homes because of the high cost of installation, which starts at around $1,500 for a 0.5 kilowatt solar system.

Tarek Labad, a spokesman for the National Economy Ministry in Gaza, told Al-Monitor that it had become necessary to lift the equipment fees to help empower residents to install equipment for solar power systems at prices in line with their financial abilities given Gaza's long-running economic crises in addition to the electricity crisis.

“Lifting import taxes on any product has a positive impact on the market,” said Labad. “This measure can increase demand by consumers for the product, revive the market and improve the economic and commercial situation.” Labad also said that his ministry has called on Palestinian banks, within the scope of their social corporate responsibility, to establish a fund for issuing loans to buy solar power equipment.