Sky rocketing electricity bills: Net metering or not metering?
View(s):By Harsha Wickramasinghe
The impending, yet inevitable electricity price hike is causing much hue and cry in town. As a measure to cope with the electricity price hikes, the writer opted to use the recently approved net metering regulations. This narrative is on how to maximise the opportunity of the newly introduced net metering scheme, by using a net metered solar photovoltaic (PV) system at any residence.
Net metered solar PV systems are beginning to emerge as pragmatic solutions to meet the ever increasing electricity prices and reduce an individual’s carbon footprint, especially for the homes which use more than 160kWh per month. As depicted in the graph, this niche market is limited to only 5% of the homes, whilst the great majority of 95% homes are benefitted from subsidised electricity.
Net metering
Net metering is a policy that allows an electricity customer to use renewable energy sources within his premises to generate electricity and utilise it within his premises, and to export it to the national grid if excess power is being generated, to be recovered when needed. Therefore, the grid acts like an energy bank for the customer. This policy originated in the USA, but has now spread to many countries, including ours. Both electricity distributors, that is, the CEB and the Lanka Electricity Company Pvt. Ltd. (LECO), offer net metering to their customers.
Both regulations are nearly the same, with the only difference in fees for net metering. Net metering involves a ten year contract, a generation facility with a limit of 10 MW or the contract demand of the premises and any renewable resource for power generation. The surplus will be credited to the customer but no payment will be made for the surplus nor can the customer sell it to another customer.
Technically, any renewable resource like hydro, wind, solar and biomass can be net-metered. But at household level, solar PV systems are the preferred option, owing to resource availability, smaller space requirements and ease of operation and maintenance. Solar PV systems are available in the market in wide variety, quality and of course, prices. The most advanced solar technologies require no special expertise to be installed. The basic requirements are a solar PV panel, a micro grid-tied inverter and careful integration of the system together. The inverter output requires to be connected to the household supply, accompanied with necessary protection and isolating equipment, while a smart (two way) meter is installed in the house by the electricity service provider. The net metering scheme is effectuated upon signing an agreement.
Installation of the Solar PV System
The Solar PV system installed on the writer’s rooftop is optimised. The word ‘optimised’ used here refers to the careful analysis of the past electricity use, the investment required and consideration of many combinations of investment to savings ratio before a decision is made on the system size. Unfortunately, the vendors present in the market are burdened with few systems sizes dictated by their principals, with no concern for the needs of the Sri Lankan market. A simple analytical tool was developed to identify the ‘right size’ for a solar net-metering solution which exploits the weaknesses of the new tariff regime. A graphical presentation of the output of the analysis is given below. With the tariff hike, the viability of solar net-metering would significantly increase, allowing a lot more homeowners to benefit from the scheme.
The array of numbers depict the simple payback period resulting from different sizes of installations for any given average monthly consumption. The tool identified a niche market (coloured patches of purple, beige and yellow) for consumers who can reap the benefits within three to five years, as indicated by the respective colour code. The vast green patch surrounding it depicts the possibilities which result in a payback period between 5-6½ years.
The steps followed during the installation
- Past electricity bills of three years were studied to ascertain variations in the power consumption pattern, and these concerns were adequately accommodated when selecting the system size.
- The surrounding environment of the house was scanned to select an exposed, sunny South sloping roof area to locate the panel and micro inverter.
- A Mono-crystalline type PV panel (ten panels of 100 W each) was selected, based on the budgetary limitations of the household, space availability and level of irradiation.
- Owing to budgetary limitations, the fixed positioning of solar panels was selected over solar tracking system. The latter is capable of tracking the motion of the sun throughout the day to get maximum power generated from the solar panels, however, is significantly expensive.
- In Colombo, solar panels need to be orientated at an angle of 7 degrees to the horizontal in the southern direction.
- The solar panels were purchased accompanied with a suitable inverter and other appropriate items, known in the PV industry as Balance of System (BoS), and installed conforming to wiring regulations governing such installations.
- The writer’s house was under the purview of the LECO area. The application of the LECO for net metering can be downloaded from the web. The furnished application should be handed over to the branch officer, after which the customer is required to enter into an Agreement, namely, “Agreement and Grid Interconnection Standards for Net Metering of an On-grid Renewable Energy based Generating Facility.”
- The electricity distributor would take necessary steps to install the net metering setup, after which the facility could start generating. The surplus could be banked to the grid legally as per the contract.
Important tips
With an assumption of a 17% plant factor for a typical meteorological year, and the efficiency of system as 90%, the cost of for a 1 kW generating facility was approximately LKR 350,000. A generating facility of 1 kW is best suited for a household using about 300 kWh, because the simple payback period is less than seven years, which is acceptable to most customers. Such a system would require around 70-100 square feet of roof area which is structurally capable of supporting around 100kg of additional weight. On average, a 1kW system will produce 120kWh (units) during a 30 day period.
The main factors affecting the payback period is the plant factor and efficiency, followed by the system cost and the effective tariff of purchasing electricity from the grid. In order to increase efficiency it would require purchasing a higher quality grid tie inverter. It is advisable to purchase solar panels with a warranty, even though used panels are available at half the original price, but with no warranty or technical assurance that those panels can be compatible with each other. Solar panels could be used instead of roofing sheets in new buildings that are being built, or even can be considered as an option in extensions like garages, annexes… etc., if exposed to direct sunlight throughout the year and can accommodate a South sloping array of panels with least aesthetic impairment.
50% of peak power is usually generated during five hours of a given day. Post project measurements and calculations show that there is an energy loss of approximately 0.375 kWh a day due to the shadow from the tall trees located west of the installation.
It will not take decades before the price of solar energyware hit the bottom, where all our domestic electricity can be met with an adequately sized system. On that near date in future, most Sri Lankans would be happy to graduate from the net-metering scheme to a ‘not-metering’ scheme, where you will not be paying any electricity bill than the fixed service charge. However, you must not be too hasty to kick-out the Electricity Distributors from the system altogether, because, it can be guaranteed that the sun would not shine at the most needed hour, and there won’t be a bank to deposit your precious solar electricity, since affordable battery storage is some few decades away from our reach.
The writer is the Deputy Director General at the Sri Lanka Sustainable Energy Authority. More information can be obtained by e-mailing harsha@energy.gov.lk .
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