Eliezer Tokman, chief executive of Siemens Israel, says the deal marks the “beginning of a solar revolution in Israel”.

Arava says it will initially build mid-sized arrays averaging 6.5MW in size at each of the kibbutzim, or agricultural co-operatives, scattered across the southern Negev desert and northern Israel. The first project will commence at Kibbutz Ketura, where Arava was founded.

However, the firm intends to expand the arrays into large-scale projects, eventually adding as much as 500MW.

Arava is one of a small handful of firms at the cutting edge of Israel’s solar industry. In August 2009 Siemens, which has growing ambitions for the solar sector, purchased a 40% stake in Arava for $15m.

Arava chief executive Jon Cohen says that Israel’s current 300MW cap on solar-generated electricity will soon begin stymieing the growth of the country’s myriad solar start-ups.

“The goal to produce 300 solar megawatts is an important step towards implementing the government's decision to produce five percent of Israel's energy consumption from renewable sources by 2014, but it's not enough,” Cohen says. “At least 1,000 megawatts are needed.”

Cohen says mid-sized solar arrays are best suited to meet the country’s requirements.

Following its investment in Arava, Siemens bought Israel’s Solel Solar Systems in October 2009 for $418m from London-based investment firm Ecofin. Solel is one of the world’s two leading suppliers of solar receivers, which are key to parabolic-trough concentrating solar power plants.

Siemens is the market leader for steam turbines for solar-thermal power plants, and also holds a stake in Italian solar-receiver maker Archimede.