Net-metering is the first nonfiscal incentive mechanism fully implemented under the Philippine Renewable Act of 2008.
To help consumers in fully understanding the net-metering concept and the ways how to benefit from it, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) through the “Renewables-Made in Germany” initiative facilitated a joint cooperation of the Department of Energy, the National Renewable Energy Board, and other contributors to publish the “Net-Metering Reference Guide.”
“The more people investing in renewable energy, the higher the overall acceptance for these technologies will get and the bigger the benefit for the overall economy will be,” said Robert Kressirer, GIZ regional director for the Philippines and Pacific Islands.
According to the guide, net-metering is two-pronged: first, generating own electricity via a renewable source such as solar energy; and second, feeding the excess electricity to the local distribution grid, with the ultimate goal to offset consumption and consequently, cost.
Under the net-metering rules, qualified residential and commercial consumers are allowed to install an on-site renewable energy facility—such as solar panel roof-top installations—not exceeding 100 kilowatts (kW) in capacity to generate electricity for their own use. Any electricity generated that is not consumed by the customer will automatically be exported to the distribution utility’s (DU) system. The DU then gives a peso credit for the excess electricity received, equivalent to the DU’s blended generation cost, excluding other generation adjustments, and deducts the credits earned to the customer’s electric bill. The rate of savings, otherwise known as avoided cost, realized on electricity generated for own use is equivalent to the DU’s retail rate consisting of charges for generation, transmission, system loss, distribution, subsidies, taxes and other charges. This, added to the peso credits earned on any excess electricity, translates to every homeowner’s dream: a lower monthly bill.
For a clearer appreciation of how the system benefits consumers, the reference guide simulated an electricity bill (using the October 2013 bill as reference) of a net-metering customer with a 2-kW solar-powered facility installed on a rooftop. With that capacity, the avoided cost from generating own electricity is estimated at P1,737.93, while the credit earned from excess electricity is P506.43. This translates to a total savings of P2,244.36 a month.
Once the investment costs for the own renewable energy system are fully recovered, these savings on the monthly electricity bill will ease the budget burden of homeowners.
Simply put, net-metering lets a homeowner control his own electricity bill, by receiving—and giving back—the power of the sun. Besides being a revolutionary way of changing how the country’s energy system works, net-metering also provides substantial economic benefits not only to one residential consumer, but at a larger scale, to the whole country.