Why is net metering attractive?
Reduction of end-consumer’s electricity costs
With installed rooftop PVs and a net metering system in place, it is possible to reduce an end-consumer’s annual electricity cost to zero. In order to do so, an end-consumer should aim to install appropriately sized rooftop solar PVs whose annual electricity production covers the end-consumer’s annual electricity consumption, if possible.
Protecting the grid and reducing the strain on Distribution & Transmission Infrastructure
Net metering policies lower the demand for electricity and allow utilities to better manage their peak electricity loads. In addition, by encouraging electricity production near the point of consumption, net metering reduces the strain on distribution systems and prevents losses in long-distance electricity transmission and distribution, which in some CEE countries amounts to up to 10% of total electricity produced.
Securing viable alternatives to electricity produced from fossil fuels at predictable prices
The Report on Renewable Power Generation Costs prepared by the International Renewable Energy Agency clearly indicates that solar and wind power production is cheaper than fossil fuels. Importantly, while fossil-fuel electricity has become more expensive in recent months, the cost of electricity produced from wind and solar appears to be stable, which could indicate that an electricity system that is predominantly based on renewables is less subject to price volatility.
Reduction of environmental risks associated with production of electricity from fossil fuels
By installing rooftop PVs and net metering, various societal benefits could be achieved, such as reduced air pollution and air quality control, which is a significant problem in several CEE countries, in particular during the winter season.
What are potential drawbacks of the model?
On the other hand, the most significant drawbacks are the relatively high costs of installing solar PVs and the risk of overloading the D&T system during the summer peaks in production.
However, based on available statistics, costs associated with rooftop PV installation have fallen 82% since 2010, and, according to latest estimates, they are expected to decrease even further – approximately 59% by 2025 (source: International Renewable Energy Agency). In addition, most countries offer subsidies for the installation of rooftop PVs, as well as other benefits to end-consumers, making this technology even more cost-effective.
Finally, greater expansion of rooftop PVs could have negative effects on the D&T networks (including reverse power flow, voltage fluctuations, power losses, etc). Some of those negative effects could be mitigated by timely investments in the D&T infrastructure. The solar potential in many CEE countries is particularly high and more and more of them are beginning to use this potential.
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