This paper proposes a new model of soil ionization, in the form of an equivalent circuit containing capacitive and resistive elements representing a network of soil particles and air voids. In previously published models, the effect of soil ionization is only indirectly considered by changing the soil resistivity and the electrode radius. This has resulted in inferior performance of those models in terms of voltage response accuracy. In this work, the energy balance concept was applied to compute the arc resistance. The soil structure is modeled by using two-layer capacitor elements. The soil ionization process is incorporated inside the two-layer capacitor elements using specially derived differential equations. Unlike previous models, a discrete form of soil ionization is used. The accuracy of the proposed equivalent circuit model was confirmed by the small differences between the computed and experimental results.