Difference between revisions of "Net Metering"

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== Overview ==
 
== Overview ==
  
Net-metering is ...
+
<u>Net-metering is:</u><br/>
*... a regulatory model that allows electricity producers to "store“ surplus electricity from variable energy sources in the national/regional/local grid, and use the "stored“ electricity to balance out deficit, allowing households/investors to meet their own electricity demand with their own production<ref>Database of State Incentives for Renewables & Efficiency (DSIRE) http://www.dsireusa.org/solar/solarpolicyguide/?id=17</ref>.
+
 
*... a system, in which the active current / electricity generated by consumers in decentralized micro- and mini- generators, is offset with the metered consumption<ref>ANEEL 2012. Regulierung Nr. 482 vom 17. April 2012 der Nationalen fckLREnergieagentur – ANEEL (Brazil)</ref>
+
*a regulatory model that allows electricity producers to "export“ surplus electricity from variable energy sources in the national / regional / local [[Portal:Grid|grid]], and use the "exported“ electricity to balance out deficit, allowing households / investors to meet their own electricity demand with their own production<ref>Database of State Incentives for Renewables & Efficiency (DSIRE) http://www.dsireusa.org/solar/solarpolicyguide/?id=17</ref>.<br/>
 +
*a system, in which the active current / electricity generated by consumers in decentralized micro- and mini- generators, is offset with the metered consumption<ref>ANEEL 2012. Regulierung Nr. 482 vom 17. April 2012 der Nationalen fckLREnergieagentur – ANEEL (Brazil)</ref><br/>
 
<div><br/></div>
 
<div><br/></div>
'''How does net metering work?'''
+
 
 +
 
 +
== How does net metering work? ==
  
 
Net metering means that both the electricity produced and consumed by a household or investor is measured. The prerequisite for net metering is economic viability of the net-metered electricity source compared to the grid price. This is also referred to as ''grid parity, ''a situation where it is cheaper to produce one's own electricity than to buy it from the national utility.
 
Net metering means that both the electricity produced and consumed by a household or investor is measured. The prerequisite for net metering is economic viability of the net-metered electricity source compared to the grid price. This is also referred to as ''grid parity, ''a situation where it is cheaper to produce one's own electricity than to buy it from the national utility.
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<br/>
 
<br/>
  
<u>The basic elements of net metering are:</u>
+
<u>The basic elements of net metering are:</u><br/>
<div><span style="line-height: 19.2px;"></span>
+
<div><span style="line-height: 19.2px"></span>
*'''Electricity generation''': electricity is usually generated by a small renewable energy system, permitting households or other small-scale investors to produce their own electricity.[[File:Illustration net metering.png|thumb|right|300px|Net Metering Illustration|alt=Illustration net metering.png]]
+
*'''Electricity generation''': electricity is usually generated by a small [[Basic Energy Services - Overview#Energy Systems|renewable energy system]], permitting households or other small-scale investors to produce their own electricity.[[File:Illustration net metering.png|thumb|right|300px|Net Metering Illustration|alt=Illustration net metering.png]]<br/>
  
 
<br/>
 
<br/>
*'''Tailored to match consumption: '''electricity generation should be sized to match consumption.<ref name="Project Development Program (PDP). 2011.">Project Development Program (PDP). 2011. "Grid connection of solar PV: Technical and economical assessment of net-metering in Kenya". GIZ, Federal Ministry of Economics & Technology.</ref>
+
*'''Tailored to match consumption: '''electricity generation should be sized to match consumption.<ref name="Project Development Program (PDP). 2011.">Project Development Program (PDP). 2011. "Grid connection of solar PV: Technical and economical assessment of net-metering in Kenya". GIZ, Federal Ministry of Economics & Technology.</ref><br/>
*'''Grid connection:''' the net metering system is integrated with the grid. Surplus electricity produced is fed into the grid (e.g. during the day with solar PV), while any deficit in production is compensated by electricity taken from the grid (e.g. during the night with solar PV)<ref>The public utilities commission of Ohio.http://www.puco.ohio.gov/puco/index.cfm/consumer-information/consumer-topics/generating-your-own-electricity-net-metering/</ref>.
+
 
*'''Metering: '''measuring the electricity produced and consumed can be done in two ways:
+
<br/>
<blockquote>''Using '''one, reversible meter''' that measures both the electricity consumed and produced.''<br/></blockquote>''[[File:Net metering with 2 meters.png|thumb|right|300px|Net Metering with 2 Meters|alt=Net metering with 2 meters.png]]''<blockquote>''Using '''two meters''' - one measuring production, the other consumption. In many cases, this dual-metering system is preferred since it allows for production and consumption to take place in different areas, and for the application of different rates for production and consumption.<ref name="Franz. M. 2012.">Franz. M. 2012. "Net metering for small RE - the next big show in town? Background and evidence from Kenya and Ghana." Presented at the GIZ Fachverbund Energy Africa, Dakar, Senegal.</ref>''</blockquote><br/></div><div>
+
*'''Grid connection:''' the net metering system is integrated with the grid. Surplus electricity produced is fed into the grid (e.g. during the day with [[Solar Energy|solar PV]]), while any deficit in production is compensated by electricity taken from the grid (e.g. during the night with solar PV)<ref>The public utilities commission of Ohio. http://energy.gov/savings/net-metering-29</ref>.<br/>
 +
 
 +
<br/>
 +
*'''Metering: '''measuring the electricity produced and consumed can be done in two ways:<br/>
 +
 
 +
''[[File:Net metering with 2 meters.png|frame|left|300px|Net Metering with two Meters|alt=Net metering with 2 meters.png]]''<br/>
 +
#''Using '''one, reversible meter''' that measures both the electricity consumed and produced.''<br/>
 +
#''Using '''two meters''' - one measuring production, the other consumption. In many cases, this dual-metering system is preferred since it allows for production and consumption to take place in different areas, and for the application of different rates for production and consumption.<ref name="Franz. M. 2012.">Franz. M. 2012. "Net metering for small RE - the next big show in town? Background and evidence from Kenya and Ghana." Presented at the GIZ Fachverbund Energy Africa, Dakar, Senegal.</ref>''<br/>
 +
<br/></div><div>
 
*'''Billing: '''billing is based on the net amount of electricity consumed per billing period - in other words, the difference between the amount of electricity consumed and the amount produced. If a household produces more electricity than it consumes, the surplus can usually be carried over (many times with a validity time limit attached), or be given to the utility without any compensation.
 
*'''Billing: '''billing is based on the net amount of electricity consumed per billing period - in other words, the difference between the amount of electricity consumed and the amount produced. If a household produces more electricity than it consumes, the surplus can usually be carried over (many times with a validity time limit attached), or be given to the utility without any compensation.
 
</div>
 
</div>
 
<br/>
 
<br/>
  
<br/>
+
 
 +
 
 +
 
  
  
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<u>While the ways in which these countries have gone about impelenting the regulation differs according to the context, several elements are recurring:</u>
 
<u>While the ways in which these countries have gone about impelenting the regulation differs according to the context, several elements are recurring:</u>
*Net metering is usually focused on smaller system sizes, in most cases with a set limit in terms of the % contribution of net metered systems to the overall energy mix.
+
 
 +
*Net metering is usually focused on smaller system sizes, in most cases with a set limit in terms of the&nbsp;% contribution of net metered systems to the overall energy mix.
 
*There are different technologies included in each country's regulations, although solar PV and wind usually feature in almost all settings since variable energy sources benefit considerably from net metering.
 
*There are different technologies included in each country's regulations, although solar PV and wind usually feature in almost all settings since variable energy sources benefit considerably from net metering.
  
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<u>The following table provides an overview of countries where net metering policies are currently in use:</u><ref>REN21, 2012. "Renewables 2012 Global Status Report", REN21 Secretariat, Paris</ref>
 
<u>The following table provides an overview of countries where net metering policies are currently in use:</u><ref>REN21, 2012. "Renewables 2012 Global Status Report", REN21 Secretariat, Paris</ref>
  
{| align="center" style="font-size: 14px; width: 800px;" border="1" cellspacing="1" cellpadding="1"
+
{| align="center" style="width: 800px; font-size: 14px;" border="1" cellspacing="1" cellpadding="1"
 
|-
 
|-
 
|  
 
|  
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[http://www.timesofmalta.com/articles/view/20100721/local/power-feed-in-tariffs-announced-gozitans-to-enjoy-better-rates.318858 ToM]
 
[http://www.timesofmalta.com/articles/view/20100721/local/power-feed-in-tariffs-announced-gozitans-to-enjoy-better-rates.318858 ToM]
  
 +
|-
 +
| [[Solar Energy for Electricity and Heat in Chile|Chile]]
 +
| 2014
 +
| Renewable Energy sources and efficient cogeneration plants.<br/>
 +
| 100 kW
 +
| <br/>
 +
| [http://www.minenergia.cl/ley20571/ Minenergia]
 
|-
 
|-
 
| colspan="6" | <p style="text-align: center;">'''''UPPER-MIDDLE INCOME COUNTRIES'''''</p>
 
| colspan="6" | <p style="text-align: center;">'''''UPPER-MIDDLE INCOME COUNTRIES'''''</p>
 
|-
 
|-
 
|  
 
|  
<span style="line-height: 1.5em;">Brazil</span>
+
<span style="line-height: 1.5em;">[[Brazil Energy Situation|Brazil]]</span><br/>
  
 
|  
 
|  
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|  
 
|  
≤ 1MW
+
5 MW<br/>
  
 
| <br/>
 
| <br/>
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|-
 
|-
 
|  
 
|  
Tunisia
+
[[Tunisia Energy Situation|Tunisia]]<br/>
  
 
|  
 
|  
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|  
 
|  
Solar PV, ?
+
Solar PV,&nbsp;?
  
 
|  
 
|  
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|-
 
|-
 
|  
 
|  
Guatemala
+
Guatemala<br/>
  
 
| <br/>
 
| <br/>
 
| Solar PV, Wind, Biomass, Hydro, Geothermal
 
| Solar PV, Wind, Biomass, Hydro, Geothermal
 
| 5 MW
 
| 5 MW
| ?
+
| &nbsp;?
 
| [http://www.naruc.org/international/Documents/Internship_presentation_MEstrada_Netmetering.pdf NARUC]
 
| [http://www.naruc.org/international/Documents/Internship_presentation_MEstrada_Netmetering.pdf NARUC]
 
|-
 
|-
 
|  
 
|  
Pakistan
+
[[Pakistan Energy Situation|Pakistan]]<br/>
  
| 2006
+
| 2015
| All Renewable Energy policies
+
| Distributed Generation and Net Metering Regulations, 2015<br/>
| 1 MW
+
| Up to 1 MW
| ?
+
| &nbsp;?
| [http://www.scribd.com/doc/93387083/33/Net-Metering GoP]
+
| [[:File:NEPRA (Alternative & Renewable Energy) Distributed Generation and Net Metering Regulations, 2015.PDF|Net Metering Regulations]]
 
|-
 
|-
 
|  
 
|  
Philippines
+
Philippines<br/>
  
 
| <br/>
 
| <br/>
 
| Wind, solar PV, Biomass, Biogas
 
| Wind, solar PV, Biomass, Biogas
| ?
+
| &nbsp;?
| ?
+
| &nbsp;?
 
| [http://eeas.europa.eu/delegations/philippines/documents/press_corner/renewable_energy_mechanisms_maniego_en.pdf EEAS]
 
| [http://eeas.europa.eu/delegations/philippines/documents/press_corner/renewable_energy_mechanisms_maniego_en.pdf EEAS]
 
|-
 
|-
 
|  
 
|  
Sri Lanka
+
Sri Lanka<br/>
  
 
| 2009
 
| 2009
 
| All Renewable Energy Sources
 
| All Renewable Energy Sources
 
| <= consumption
 
| <= consumption
| ?
+
| &nbsp;?
 
| [http://www.island.lk/2009/01/14/features1.html The Island]
 
| [http://www.island.lk/2009/01/14/features1.html The Island]
 
|}
 
|}
  
''Apart from the abovementioned countries, the following countries also have functioning net metering legislation: Canada, Japan, Lebanon, Mexico, Panama, Portugal, Singapore, South Korea, Uruguay, USA.''
+
<br/>
 +
 
 +
<u>Apart from the abovementioned countries, the following countries also have functioning net metering legislation:</u>
 +
 
 +
Canada, Japan, [[Lebanon Energy Situation|Lebanon]], [[Mexico Energy Situation|Mexico]], Panama, Portugal, Singapore, South Korea, Uruguay, USA.<br/>
  
 
<br/>
 
<br/>
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|-
 
|-
 
|  
 
|  
Ghana
+
[[Ghana Energy Situation|Ghana]]<br/>
  
 
|  
 
|  
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|-
 
|-
 
|  
 
|  
Kenya
+
[[Kenya Energy Situation|Kenya]]<br/>
  
 
|  
 
|  
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|-
 
|-
 
|  
 
|  
Senegal
+
[[Senegal Energy Situation|Senegal]]<br/>
  
 
|  
 
|  
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|}
 
|}
  
<br/>
+
<br/><br/>
 +
 
  
<br/>
+
== Pro's and Con's of Net Metering ==
  
 +
<u>There are two cases to be made for applying net-metering in developing countries:</u>
 +
*the economic case, and
 +
*the regulatory/policy case<ref name="Franz. M. 2012.">Franz. M. 2012. "Net metering for small RE - the next big show in town? Background and evidence from Kenya and Ghana." Presented at the GIZ Fachverbund Energy Africa, Dakar, Senegal.</ref>.
  
== Pro's and Con's of Net Metering ==
+
<br/>
  
There are two cases to be made for applying net-metering in developing countries: the economic case, and the regulatory/policy case<ref name="Franz. M. 2012.">Franz. M. 2012. "Net metering for small RE - the next big show in town? Background and evidence from Kenya and Ghana." Presented at the GIZ Fachverbund Energy Africa, Dakar, Senegal.</ref>.
+
The economic case is primarily built on the fact that certain renewable energy generation costs have reached, or will shortly reach, '''grid parity''' in many developing countries.
  
The ''economic case'' is primarily built on the fact that certain renewable energy generation costs have reached, or will shortly reach, '''''grid parity''''' in many developing countries.
+
<br/>
  
{| style="width: 800px; font-size: 14px;" border="1" cellspacing="1" cellpadding="1"
+
{| cellspacing="1" cellpadding="1" border="1" style="width: 800px;  font-size: 14px"
 
|-
 
|-
| '''''Grid parity''' can be defined in two ways<ref>Farrell, J. 2012. "Solar Grid Parity 101". http://www.ilsr.org/solar-grid-parity-101/</ref>:''
+
| <u>'''Grid parity''' can be defined in two ways<ref>Farrell, J. 2012. "Solar Grid Parity 101". http://www.ilsr.org/solar-grid-parity-101/</ref>:</u>
*'''''Current unit cost''' (e.g. in € / kWh) : current unit cost of electricity produced by a renewable energy source (e.g. solar PV) < current unit cost of grid electricity''
+
*'''Current unit cost''' (e.g. in € / kWh): current unit cost of electricity produced by a renewable energy source (e.g. solar PV) < current unit cost of grid electricity<br/>
*'''''Levelised / future unit cost''' (e.g. in € / kWh) levelized (lifetime of the project, e.g. for the next 20 years) unit costs of a renewable energy source < levelized cost of grid electricity (depends on projected growth, mix of sources, inflation etc.)''
+
*'''Levelised / future unit cost''' (e.g. in € / kWh) levelized (lifetime of the project, e.g. for the next 20 years) unit costs of a renewable energy source < levelized cost of grid electricity (depends on projected growth, mix of sources, inflation etc.)
  
 
|}
 
|}
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*Both technical and regulatory capacity is needed to ensure that net-metering systems are installed correctly, that distribution networks are able to accommodate net-metered systems and that the appropriate regulation is developed and implemented.
 
*Both technical and regulatory capacity is needed to ensure that net-metering systems are installed correctly, that distribution networks are able to accommodate net-metered systems and that the appropriate regulation is developed and implemented.
  
<br/>
+
 
  
 
== Success Factors for Net Metering ==
 
== Success Factors for Net Metering ==
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*'''Regulatory capacity: '''regulatory authorities need to have the capacity to ensure that net metering policies and regulations are not only well developed, but also properly implemented.
 
*'''Regulatory capacity: '''regulatory authorities need to have the capacity to ensure that net metering policies and regulations are not only well developed, but also properly implemented.
  
<br/>
+
 
 +
 
  
 
== GIZ Experience with Net Metering ==
 
== GIZ Experience with Net Metering ==
  
*'''Brazil''': The GIZ Energy Programme, “Renewable Energy Sources and Energy Efficiency”, is running from 2013 to 2015<ref>GIZ, "Energy programme for Brazil" http://www.giz.de/de/weltweit/12565.html</ref>. Among other activities, GIZ is assisting the Brazilian Energy Regulatory Authority (ANEEL), local governmental institutions and other stakeholders to develop and implement net-metering policy<ref name="Project Development Program (PDP). 2011.">Project Development Program (PDP). 2011. "Grid connection of solar PV: Technical and economical assessment of net-metering in Kenya". GIZ, Federal Ministry of Economics & Technology.</ref>. Net metering legislation was enacted in April 2012, covering all renewable energy systems up to 1 MW<ref>Figueiredo, R. 2012. "Brazil's attempt at distributed generation: will net metering work?" Renewable Energy World. http://www.renewableenergyworld.com/rea/news/article/2012/07/brazils-attempt-at-distributed-generation-will-net-metering-work</ref>.
+
► [http://www.giz.de/en/ Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)]
*'''Kenya''': Through the Project Development Programme (PDP) and a development partnership (develoPPP), GIZ has been supporting the Kenyan authorities in developing net metering legislation and policy. Net metering has now been included in draft energy policy, forming part of wider energy sector reforms taking place. Two pilot projects feeding solar PV into the national grid have been launched: a 60 kW installation at the SOS Children’s Village in Mombasa; and a 515 kW system on the roof of the UNEP offices<ref name="Franz. M. 2012.">Franz. M. 2012. "Net metering for small RE - the next big show in town? Background and evidence from Kenya and Ghana." Presented at the GIZ Fachverbund Energy Africa, Dakar, Senegal.</ref>. The EU Energy Initiative Partnership Dialogue Facility (EUEI PDF) is also providing further support to formulate net-metering regulation in the country through a project under the Renewable Energy Cooperation Programme (RECP).
 
*'''Mexico''': GIZ is providing energy sector technical assistance to Mexico as part of the “Sustainable Energy Mexico” program<ref>GIZ. "Sustainable Energy in Mexico". http://www.giz.de/themen/en/27816.htm</ref>. Net metering has been possible in the country since 2007, with capacity limits set at 30kW and 500kW respectively, depending on whether a net-metered system is classified as small- or medium-scale<ref name="Project Development Program (PDP). 2011.">Project Development Program (PDP). 2011. "Grid connection of solar PV: Technical and economical assessment of net-metering in Kenya". GIZ, Federal Ministry of Economics & Technology.</ref>.
 
*'''Morocco''': The “Promotion of Renewable Energy and Energy Efficiency” project, implemented by GIZ, has as one of its components the assessment of the potential for grid-connected solar PV in Morocco<ref>GIZ. 2012. "The promotion of renewable energy and energy efficiency - the 'PEREN' project". http://www.giz.de/Themen/de/dokumente/giz2012-renewable-energy-peren-en.pdf</ref>. The assessment has shown that Morocco will achieve grid-parity for all customer categories by 2013. GIZ is also developing a “million roofs program” proposal, which is dependent on net metering. While there are currently no specific net metering regulations in place, a law published in 2010 makes it possible to connect medium- and high-voltage renewable energy based systems to the grid<ref name="Project Development Program (PDP). 2011.">Project Development Program (PDP). 2011. "Grid connection of solar PV: Technical and economical assessment of net-metering in Kenya". GIZ, Federal Ministry of Economics & Technology.</ref>.
 
  
<br/>
+
*'''[[Net Metering in Brazil|Brazil]]''': The [https://www.giz.de/en/worldwide/12565.html GIZ Energy Programme, “Renewable Energy Sources and Energy Efficiency”], is running from 2013 to 2015<ref>GIZ, "Energy programme for Brazil" http://www.giz.de/de/weltweit/12565.html</ref>. Among other activities, GIZ is assisting the [http://www.aneel.gov.br/?idiomaAtual=1 Brazilian Energy Regulatory Authority (ANEEL)], local governmental institutions and other stakeholders to develop and implement net-metering policy<ref name="Project Development Program (PDP). 2011.">Project Development Program (PDP). 2011. "Grid connection of solar PV: Technical and economical assessment of net-metering in Kenya". GIZ, Federal Ministry of Economics & Technology.</ref>. Net metering legislation was enacted in April 2012, covering all renewable energy systems up to 1 MW<ref>Figueiredo, R. 2012. "Brazil's attempt at distributed generation: will net metering work?" Renewable Energy World. http://www.renewableenergyworld.com/rea/news/article/2012/07/brazils-attempt-at-distributed-generation-will-net-metering-work</ref>.<br/>
 +
*'''[[Kenya Energy Situation|Kenya]]''': Through the [http://www.renewables-made-in-germany.com/en/networking-in-your-country/renewable-energy-project-development-programme-pdp.html Project Development Programme (PDP)] and a [http://www.developpp.de/en/content/developppde development partnership (develoPPP)], GIZ has been supporting the Kenyan authorities in developing net metering legislation and policy. Net metering has now been included in draft energy policy, forming part of wider energy sector reforms taking place. Two pilot projects feeding solar PV into the national [[Portal:Grid|grid]] have been launched: a 60 kW installation at the SOS Children’s Village in Mombasa; and a 515 kW system on the roof of the [http://www.unep.org/roa/Programmes/KenyaCountryProgramme/tabid/51365/Default.aspx UNEP offices]<ref name="Franz. M. 2012.">Franz. M. 2012. "Net metering for small RE - the next big show in town? Background and evidence from Kenya and Ghana." Presented at the GIZ Fachverbund Energy Africa, Dakar, Senegal.</ref>. The [http://www.euei-pdf.org/ EU Energy Initiative Partnership Dialogue Facility (EUEI PDF)] is also providing further support to formulate net-metering regulation in the country through a project under the [http://www.euei-pdf.org/sites/default/files/files/field_pblctn_file/RECPstrategy2020en_lowres_0.pdf Renewable Energy Cooperation Programme (RECP)].<br/>
 +
*'''Mexico''': GIZ is providing energy sector technical assistance to Mexico as part of the [http://www.giz.de/en/worldwide/13919.html “Sustainable Energy Mexico” program]<ref name="GIZ.">GIZ. "Sustainable Energy in Mexico". http://www.giz.de/en/worldwide/13919.html</ref>. Net metering has been possible in the country since 2007, with capacity limits set at 30kW and 500kW respectively, depending on whether a net-metered system is classified as small- or medium-scale<ref name="Project Development Program (PDP). 2011.">Project Development Program (PDP). 2011. "Grid connection of solar PV: Technical and economical assessment of net-metering in Kenya". GIZ, Federal Ministry of Economics & Technology.</ref>.<br/>
 +
*'''[[Morocco Energy Situation|Morocco]]''': The [https://www.giz.de/en/downloads/giz2012-renewable-energy-peren-en.pdf “Promotion of Renewable Energy and Energy Efficiency” project], implemented by GIZ, has as one of its components the assessment of the potential for grid-connected solar PV in Morocco<ref>GIZ. 2012. "The promotion of renewable energy and energy efficiency - the 'PEREN' project". https://www.giz.de/en/downloads/giz2012-renewable-energy-peren-en.pdf</ref>. The assessment has shown that Morocco will achieve grid-parity for all customer categories by 2013. GIZ is also developing a “million roofs program” proposal, which is dependent on net metering. While there are currently no specific net metering regulations in place, a law published in 2010 makes it possible to connect medium- and high-voltage renewable energy based systems to the grid<ref name="Project Development Program (PDP). 2011.">Project Development Program (PDP). 2011. "Grid connection of solar PV: Technical and economical assessment of net-metering in Kenya". GIZ, Federal Ministry of Economics & Technology.</ref>.<br/>
 +
*'''Chile:&nbsp;'''The project [[Solar_Energy_for_Electricity_and_Heat_in_Chile|“Solar energy for the production of electricity and heat”]] from the [http://www.giz.de/en/worldwide/23041.html GIZ] supported the working group of the Chilean Ministry of Energy and the regulator (CNR) in developing the necessary implementing regulations and technical standards for the distributed generation law 20.571 for [[Net-Metering_/_Billing_in_Chile|Net-Metering/Billing]]. The law went into effect since October 23rd 2014.
  
  
= Further Information =
+
== Further Information ==
  
GIZ - FRE: [https://energypedia.info/wiki/Net_Metering_Brazil_(FRE) Net Metering in Brazil]
+
*[[Portal:Grid|Grid Portal on energypedia]]<br/>
 +
*[[Net Metering in Brazil|Net Metering in Brazil]]<br/>
 +
*[[Metering and Billing Systems|Metering and Billing Systems]]<br/>
  
 +
<br/>
  
= References =
+
== References ==
  
<references />
+
<references /><br/>
  
 
[[Category:Net_Metering]]
 
[[Category:Net_Metering]]
 +
[[Category:Grid]]

Latest revision as of 10:00, 12 March 2024

Overview

Net-metering is:

  • a regulatory model that allows electricity producers to "export“ surplus electricity from variable energy sources in the national / regional / local grid, and use the "exported“ electricity to balance out deficit, allowing households / investors to meet their own electricity demand with their own production[1].
  • a system, in which the active current / electricity generated by consumers in decentralized micro- and mini- generators, is offset with the metered consumption[2]


How does net metering work?

Net metering means that both the electricity produced and consumed by a household or investor is measured. The prerequisite for net metering is economic viability of the net-metered electricity source compared to the grid price. This is also referred to as grid parity, a situation where it is cheaper to produce one's own electricity than to buy it from the national utility.


The basic elements of net metering are:

  • Electricity generation: electricity is usually generated by a small renewable energy system, permitting households or other small-scale investors to produce their own electricity.
    Illustration net metering.png
    Net Metering Illustration


  • Tailored to match consumption: electricity generation should be sized to match consumption.[3]


  • Grid connection: the net metering system is integrated with the grid. Surplus electricity produced is fed into the grid (e.g. during the day with solar PV), while any deficit in production is compensated by electricity taken from the grid (e.g. during the night with solar PV)[4].


  • Metering: measuring the electricity produced and consumed can be done in two ways:
Net metering with 2 meters.png
Net Metering with two Meters

  1. Using one, reversible meter that measures both the electricity consumed and produced.
  2. Using two meters - one measuring production, the other consumption. In many cases, this dual-metering system is preferred since it allows for production and consumption to take place in different areas, and for the application of different rates for production and consumption.[5]

  • Billing: billing is based on the net amount of electricity consumed per billing period - in other words, the difference between the amount of electricity consumed and the amount produced. If a household produces more electricity than it consumes, the surplus can usually be carried over (many times with a validity time limit attached), or be given to the utility without any compensation.





How and Where Has Net Metering Been Applied

Net metering has been successfully implemented in both developed and developing countries.

While the ways in which these countries have gone about impelenting the regulation differs according to the context, several elements are recurring:

  • Net metering is usually focused on smaller system sizes, in most cases with a set limit in terms of the % contribution of net metered systems to the overall energy mix.
  • There are different technologies included in each country's regulations, although solar PV and wind usually feature in almost all settings since variable energy sources benefit considerably from net metering.


The following table provides an overview of countries where net metering policies are currently in use:[6]

Country

Implemented

Energy sources

Size limits

Contribution limits

Source

HIGH INCOME COUNTRIES

Barbados

2013

Wind, solar PV or hybrid(wind/solar)

150 kW max per system, to a total of 7,000 kW

?

CREDP


Belgium

2004

All Renewable Energy sources

?

?

EREC

Denmark

2010

Wind, Solar, Biomass

6 kW

?

DENA

Italy

2006

All Renewable Energy sources

200 kW

?

REN21

Malta

2010

Solar PV

3 kW (hh) 100 kW (business)

7.5 MW/year

ToM

Chile 2014 Renewable Energy sources and efficient cogeneration plants.
100 kW
Minenergia

UPPER-MIDDLE INCOME COUNTRIES

Brazil

2012

Hydraulic, Solar, Wind, Biomass, Cogeneration

5 MW


ANEEL

Dominican Republic

2011


25 kW (hh); 1 MW (business)


IDB

Jordan

2010

All Renewable Energy Sources

?

?

Jordan Times

Tunisia

2009

Solar PV, ?

1 - 2 kW

?

Blogbouha

LOWER-MIDDLE INCOME COUNTRIES

Guatemala


Solar PV, Wind, Biomass, Hydro, Geothermal 5 MW  ? NARUC

Pakistan

2015 Distributed Generation and Net Metering Regulations, 2015
Up to 1 MW  ? Net Metering Regulations

Philippines


Wind, solar PV, Biomass, Biogas  ?  ? EEAS

Sri Lanka

2009 All Renewable Energy Sources <= consumption  ? The Island


Apart from the abovementioned countries, the following countries also have functioning net metering legislation:

Canada, Japan, Lebanon, Mexico, Panama, Portugal, Singapore, South Korea, Uruguay, USA.


Net metering is also being developed and piloted in the following low-income countries:

Country

Status

Ghana

Net-metering is being piloted by private sector, although no specific regulation exists yet[5].

Kenya

Net-metering forms part of draft energy policy, and 2 pilot systems are feeding into the grid. Regulations are being developed[5]

Senegal

?




Pro's and Con's of Net Metering

There are two cases to be made for applying net-metering in developing countries:

  • the economic case, and
  • the regulatory/policy case[5].


The economic case is primarily built on the fact that certain renewable energy generation costs have reached, or will shortly reach, grid parity in many developing countries.


Grid parity can be defined in two ways[7]:
  • Current unit cost (e.g. in € / kWh): current unit cost of electricity produced by a renewable energy source (e.g. solar PV) < current unit cost of grid electricity
  • Levelised / future unit cost (e.g. in € / kWh) levelized (lifetime of the project, e.g. for the next 20 years) unit costs of a renewable energy source < levelized cost of grid electricity (depends on projected growth, mix of sources, inflation etc.)


Key drivers include:
  • The excellent renewable energy resource regimes in many developing countries (e.g. solar radiation).
  • The dramatically falling costs of certain renewable energy technologies, especially solar PV panels.
  • The high and often fluctuating electricity tariffs (e.g. driven by the high reliance on thermal / diesel- based power generation with high and fluctuating variable costs).
  • Growing maturity of RE technology and business models


For the energy authorities in developing countries, the regulatory/policy case is based on the following reasons:

  • Net-metering allows for the production of additional electricity, freeing up other generation resources. For utilities, net metering is therefore in effect similar to demand side management / energy efficiency measures.
  • Decentralized generation and modern inverters can assist in stabilizing the grid.
  • Net-metering is (should be) light-handed regulation with low transaction costs.
  • There are the standard benefits related to increased renewable energy generation, such as savings on fuel imports, job creation, carbon financing options, etc.
  • Net-metering is also complimentary to feed-in tariffs (FiTs) (a regulatory/policy tool being used in an increasing number of countries), as it targets system sizes usually not targetted by FiTs.

There are however also challenges and risks involved[3]:
  • Utilities stand to lose revenue as consumption from the grid is replaced by self-generated power. Furthermore, utilities are de facto providing a service by "storing" electricity in the grid (for variable RE also balancing!), and could therefore make the case for a compensation.
  • The increased use of variable power sources, such as solar PV or wind, can threaten grid stability. Net metering will therefore have to feature in overall power system planning.
  • Both technical and regulatory capacity is needed to ensure that net-metering systems are installed correctly, that distribution networks are able to accommodate net-metered systems and that the appropriate regulation is developed and implemented.


Success Factors for Net Metering

  • Policy: net metering should form part of overall policy and planning, providing clear market signals.The policy should therefore be detailed, transparent and publicly available.
  • Regulation: energy regulations must make provision for net metering, clearly setting out the energy sources & technologies included, the system capacity limits, standards, electricity rates, application process, overall contribution limits (if any) as well as other provisions, exemptions and any other modality required to make it work in practice.
  • Agreement with utilities: electricity utilities that will be affected by net metering should agree to accept and "buy" electricity generated by net metered systems, as this will affect their overall performance and possibly grid stability. The utility will most likely also be in charge of inspecting and approving net metered systems.
  • Technical expertise: technical capacity is needed, both at regulatory and utility level, to ensure the proper application and management of net metering standards. At the private sector level, it is also important that technicians have the technical capacity to install and service net metered systems.
  • Regulatory capacity: regulatory authorities need to have the capacity to ensure that net metering policies and regulations are not only well developed, but also properly implemented.



GIZ Experience with Net Metering

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)


Further Information


References

  1. Database of State Incentives for Renewables & Efficiency (DSIRE) http://www.dsireusa.org/solar/solarpolicyguide/?id=17
  2. ANEEL 2012. Regulierung Nr. 482 vom 17. April 2012 der Nationalen fckLREnergieagentur – ANEEL (Brazil)
  3. 3.0 3.1 3.2 3.3 3.4 Project Development Program (PDP). 2011. "Grid connection of solar PV: Technical and economical assessment of net-metering in Kenya". GIZ, Federal Ministry of Economics & Technology.
  4. The public utilities commission of Ohio. http://energy.gov/savings/net-metering-29
  5. 5.0 5.1 5.2 5.3 5.4 Franz. M. 2012. "Net metering for small RE - the next big show in town? Background and evidence from Kenya and Ghana." Presented at the GIZ Fachverbund Energy Africa, Dakar, Senegal.
  6. REN21, 2012. "Renewables 2012 Global Status Report", REN21 Secretariat, Paris
  7. Farrell, J. 2012. "Solar Grid Parity 101". http://www.ilsr.org/solar-grid-parity-101/
  8. GIZ, "Energy programme for Brazil" http://www.giz.de/de/weltweit/12565.html
  9. Figueiredo, R. 2012. "Brazil's attempt at distributed generation: will net metering work?" Renewable Energy World. http://www.renewableenergyworld.com/rea/news/article/2012/07/brazils-attempt-at-distributed-generation-will-net-metering-work
  10. GIZ. "Sustainable Energy in Mexico". http://www.giz.de/en/worldwide/13919.html
  11. GIZ. 2012. "The promotion of renewable energy and energy efficiency - the 'PEREN' project". https://www.giz.de/en/downloads/giz2012-renewable-energy-peren-en.pdf