May 21, 2019
The price limitation for photovoltaic systems has greatly reduced the return on investment and brought the stalemate to a standstill, but it can still escape through energy netting.
In recent years, the rapid growth of photovoltaics in our country has been based on the model of guaranteed sales prices or Feed-in-Tariffs (FiT). It is a model developed in Germany bringing it to the top of the countries with the highest penetration of photovoltaic, despite its very low sunshine. The application of the German model in our country, coupled with the specificities of the domestic electricity market, has created a large economic deficit that, according to the forecast of the LAGIE market operator, will exceed 1.4 billion by the end of 2014. It is obvious that in our country, apart from the model of operation of the electricity market, the model of integration of the new photovoltaic units as well as of the other RES technologies in general must also be changed.
In recent times in our country, the voice of adopting another model based on self-consumption is growing and is known as energy netting. This model is particularly widespread in the US under the name Net Metering (Hellenic Energy Clearing). Net Metering allows the final consumer to install a production system to meet its electricity needs. Energy netting is expected to be implemented soon in our country as, according to the Ministry of the Environment, Energy and Climate Change, it will be part of the new draft law on RES, which will soon be submitted to parliament.
What is Net Metering?
Net Metering refers to an agreement between the electricity company and an electricity consumer installing a local power generation system. The agreement provides that if, during a countdown period, electricity production is greater than consumption, the surplus is credited to the next billing invoice. If production is lower than consumption, the consumer is only charged for the difference. If at the end of one year from the installation of the production system, there is finally an excess of energy, it is lost and the process starts from the beginning for the next year.
If during one year the production system produces energy equal to total annual consumption, the consumer pays nothing to the electricity company.
The main advantages of Net Metering are:
In our country, current electricity costs and current photovoltaic supply and installation prices make Net Metering an advantageous choice for large household consumption as well as for the vast majority of commercial consumption.
Net Metering, however, can provide an outlet for small consumers, since it gives them an important incentive to cover a large part of their fixed energy needs using electricity. A typical example is the replacement of the oil burner by a heat pump. In the last year, the state has significantly increased the price of heating oil.
Many consumers have been forced to restrict their consumption or have turned to other more economical alternatives.
An alternative was the installation of a heat pump. However, the use of these pumps was limited by consumers’ fear of constant increases in the cost of electricity.
Let’s look at a typical example:
A typical detached house
Let us consider as a typical example a four-person family living in a detached house of about 150 sq. M. with an oil burner that fuses a classic heater system. First of all, the family meets its needs for hot water, with an already installed solar water heater. The annual cost of electricity and heating is:
4.500 kWh x 0.16 € / kWh ~ 750 €
2.000 lt x 1.30 € / lt ~ 2.600 €
Total 3,350 €
The average cost of electricity of € 0.16 / kWh not only includes PPC’s, but also regulated charges, the Special Gas Fuel Reduction Fee (ETEMAR) and all taxes. Municipal taxes and charges are not included, ERT and EYTSD.
So let’s look at the options that this family has at its disposal.
Install only photovoltaic modules
Let’s assume that this family decides to cover only its electrical consumption with a photovoltaic system that works by making Net Metering.
Because the average annual output of a photovoltaic in our country is about 1,400 kWh per installed kW, to cover the annual house needs, a small photovoltaic power system is just enough:
4.500 kWh ÷ 1.400 kWh / kWp 3.2 kW
A 3,5 kW photovoltaic plant costs about 7,000.
Since photovoltaics will only cover electricity consumption of around 750 €, the investment is depreciated at around 9½ years. However, if we take into account the constant increases in electricity charges, the final real depreciation of the system can easily reach even 7½ years.
Install only heat pump
Suppose now that this family decides to replace the oil burner with an 8 kW heat pump, with a total procurement and installation cost of around € 7,500.
Because the conventional heat exchangers operate at temperatures of 65-70oC, the heat pump to be used must be of a special type.
These pumps are also known as high temperature heat pumps and have a Coefficient of Performance (CoP) of about 2.5.
Since the calorific value of the oil is about 10.8 kWh / lt of oil, to heat the house it takes about:
2,000 lt oil x 10,8 kWh / lt
21,600 kWh To produce the specific amount of heat from a high temperature heat pump, electricity must be consumed equal to:
21,600 kWh: 2,5 = 8,640 kWh
Thus, the annual household electricity needs are:
Electricity: 4,500 kWh
Heat pump: 8,640 kWh
Total 13.140 kWh x 0.21 € / kWh 2.760 €
In the above calculation, the average cost of electricity increased from 0.16 to 0.21 € per kilowatt hour, since the increase in the total consumption from the addition of the pump resulted in a change in the charging rate, both in the PPC tariffs, and regulated charges.
The total annual cost was reduced by about 18% compared to the initial situation. A reduction that, taking into account a reasonable and relatively low annual increase of 4-5% in the cost of electricity, will be eroded in the next 4 to 5 years. Of course, the final benefit also depends on the parallel increases or decreases in the cost of supplying heating oil.
It should be noted that if the house had a low temperature heating system (eg underfloor heating or fan coil), the savings would be much higher, since the low temperature heat pumps have higher coefficients of CoP 3,5 or even 4 , 0. This example is not considered, since the majority of heating systems in our country include heating systems with high temperature radiators (radiators).
Combined installation of photovoltaic and heat pump
Since the average annual output of a photovoltaic power plant in our country is about 1,400 kWh per installed kW, to cover the total annual electricity requirements of the dwelling as a whole and after installing the heat pump, a small photovoltaic power system is sufficient:
14,000 kWh: 1,400 kWh / kWp
A 9.5 kW photovoltaic plant currently costs from 15.000 to 17.000 €, a cost which should be added to the sum of 7,500 € of the heat pump.
The total investment for the home is: Heat pump: 7.500 € Photovoltaics: 16,000 € Total 23,500 €
With a total cost of 23,500 €, this family has secured its heating and electricity for approximately 20-25 years, saving about 3,350 € each year compared to the original situation.
With current electricity and oil prices, the cost of the investment is amortized in about 7 years.
Taking into account both the increase in the cost of electricity and heating oil in the coming years, the depreciation of the system can easily reach even 5 years, drastically reducing the annual operating costs of the home.
The example shows that the ability to apply Net Metering to the photovoltaic installation as well as to the RES in general should not be considered in one dimension only within the context of existing consumption.
The cheap electricity provided by Net Metering and protection against future increases motivate end consumers to increase their electricity consumption by converting to electricity some of other important energy needs such as heating, and moving with the use of an electrical medium.
Legislative registration of net-metering in photovoltaics
The fact that the new guaranteed sales prices of PV power are now lower than the retail purchase price of electricity opens the way for the implementation of net-metering and self-consumption systems.
Apparently, in order to do this, the institutionalization of both net-metering and self-consumption is required, but also the adaptation of the DATHH to the new data (eg acceptance and supply of two-way meters, drastic reduction of connection costs compared to current levels). We typically mention that the cost of connecting a home system to Greece is 800-1,000 € plus VAT when the corresponding cost in Germany is in the range of 150 €.
In any case, the current system of fixed guaranteed prices (albeit low) should continue to exist, as any other scheme will take time to mature and dominate the market.
The question is what is the most appropriate scheme for implementing net-metering and self-consumption. The Association of Photovoltaic Companies believes that the most appropriate scheme would be to connect the consumer with a two-way meter and be charged only for the energy consumed and exceeds the one produced during a metering period. If production exceeds consumption, this excess could be credited to the next measurement periods, but this credit may not exceed a total amount of time (as example one year).
This net-metering scheme directs the consumer to dimension his system close to his annual consumption so as not to miss out on profits.
In the case of two cash (incoming / outgoing energy), although there is no technical question, there is a risk that netting does not apply to taxes and charges, so that the repayment of the system takes much more time making the investment unattractive.
The net-metering and self-consumption scheme can be applied to all roofs without power restrictions to open a new market (commercial, agricultural, industrial roofs).
Given that legislation is forthcoming on the issue, we are listing below the proposals of the Association of Photovoltaic Companies. The proposal is an adaptation of the proposal made to the public consultation by the Ministry for the Environment, Physical Planning and Public Works last April. That proposal provided that “the energy produced by the station is offset in each energy consumption count cycle in the autoproducer plant fed by the station. Any surplus energy resulting from the offsetting of the preceding sub-paragraph shall be channeled to the grid without any liability for any compensation to the autoproducer. ”
We propose the following wording of the relevant article (Article 10 in the public consultation):
“Installation of photovoltaic stations and small wind turbine stations by autoproducers.
It is possible to install photovoltaic stations and small wind turbines from autoproducers in their facilities connected to the grid. For the areas characterized by RAE as areas with saturated networks according to the procedure of the last two paragraphs of paragraph a) of paragraph 5 of article 3 of Law 3468/2006 for the application of the previous paragraph, it is determined by decision of RAE a margin of power upon the recommendation of the network administrator. The energy produced from the station is offset in each counting cycle with the energy consumed at the plant’s own power plant. The autoproducer is only charged for the difference between energy consumed and any charges, taxes and charges borne by consumption are imposed only on that difference. Any surplus energy resulting from offset-consumed energy offset during a counting cycle is credited to the autoproducer in the subsequent counting cycles, up to zeroing the energy-consumed balance over a 12-month period. Any surplus energy resulting from the offsetting of the preceding sub-paragraph is channeled to the grid without any liability for any compensation to the autoproducer. By decision of the Minister of Environment, Energy and Climate Change, following the recommendation of the relevant Administrator and RAE’s opinion, the type, content and procedure for the compilation of electricity netting contracts shall be determined in accordance with the provisions hereof, as well as any specific matter necessary detail. By the decision of the previous paragraph it is possible to set compensation from the supplier for the special management account of article 40 of law 2773/1999 (A 286) for a percentage of the surplus energy resulting from the offsetting and is channeled to the network without obligation for any compensation to the autoproducer.
The stations of this article are exempted from the suspension of the permitting procedure under the provisions of paragraph 1 (b) of paragraph 3 of Article 1 of Law 3468/2006, as added by Article 1 of Law 3851/2010. The provisions of Article 13 of Law 3468/2006 and the provision of paragraph 3 of Article 9 herein do not apply to the stations for which a definitive connection offer will be granted in accordance with the provisions of this article and consequently the corresponding netting agreement will be concluded.
The power of the stations of this article is taken into account for the assessment of the possible coverage of the power limits established in accordance with the provisions of paragraph 3 (b) of Article 1 of Law 3468/2006 as added by Article 1 .3851 / 2010 “.
Net metering in Cyprus for 2000 households
Cyprus, through its net metering program, will fund 2,000 photovoltaic installations on low-income houses.
Cyprus, through its net metering program, will fund 2,000 photovoltaic installations on low-income houses.
The program, announced this week after a meeting of the Cyprus Chamber of Commerce and Economy Committees, will cost about € 5,000,000 to be paid by the Cyprus Special Fund for the Development and Promotion of Renewable Energy Sources and the energy efficiency.
The installation of the photovoltaic systems on the roofs is expected to begin in 2013, immediately after the adoption of the budget by the Cypriot parliament.
The eligibility of households to participate in the program will be entirely based on income criteria. All photovoltaic roof installations should be connected to the electricity grid of the Electricity Authority of Cyprus (EAC) through net metering.
Lefteris Christoforou, head of the Trade Committee, told reporters that after the installation of photovoltaic systems, the electricity costs of the 2,000 households participating in the program will be about 80% less than current spending.
While the Trade Committee actively supports the expansion of the clean metering program across Cyprus to provide households with the opportunity to cut electricity bills and small businesses to increase their competitiveness, Christoforou said it was unclear while net metering will be available to all households and businesses concerned due to technical issues still to be resolved.
The Cypriot government, added Christoforou, wants to gradually expand the net metering program across the country so that the EAC can cope better with the expansion of the network. He also asked the government to act quickly to add more net metering facilities in 2014 and 2015.
Cyprus presented net metering policies for home photovoltaic systems in April 2013. In May, the University of Cyprus announced that it will lead a € 1,300,000 European net metering research project to be funded by the European Union.
The new Cypriot government, elected in February, has expressed plans to boost the troubled local economy through the development of renewable energies and green investments. By introducing net metering policies for domestic photovoltaic systems in April and funding photovoltaic ceiling installations for 2,000 low income families, they are considered as the first in a series of measures to promote renewable energy in Cyprus.