The Israeli Parliament, also known as the Knesset, has announced a tender for the installation of a 400 kW solar PV system on its roof via the country’s net metering program. The deadline for applications is 10th April and the price bids are not capped.
The Knesset net metering installation is a part of program to green the parliament, which upon completion, the Knesset suggests, will make the building the greenest Parliament building in the world.
Israel legislated the regulations for net metering in March 2013, making it possible for households and businesses to install solar PV systems up to 5 MW.
The country’s Public Utilities Authority and Electricity regulator (PUA) has also established net metering installation caps of 200 MW for 2013 and 200 MW for 2014.
To date, net metering installations stand at around 10 MW, while in 2013 alone applications for 36 MW of net metering systems were submitted.
According to the regulator, entities that own a net metering solar PV system are able to save their electricity retail tariff through self-consumption, minus grid ‘balancing costs’ estimated at 0.015 NIS kW ($0.04 cents). Thus, electricity production surplus fed to the grid is rewarded as ‘credit’, which is then struck from the consumer’s electricity bill at the end of the month.
Owners of net metering solar PV systems are also charged for using the grid at a tariff depending on the consumer’s grid voltage line (high/low voltage) and the time of using the grid.
The Israeli net metering system is generous in that it allows consumers to accumulate and transfer credit up to a maximum period of two years.
Net metering innovation
Eitan Parnass, founder and chairman of the Green Energy Association, Israel’s main green energy lobbying group promoting solar PV, told pv magazine that net metering regulation “has kick-started a very nice market in Israel and we see healthy competition between the local developers beginning to boil.”
For this to happen, though, Parnass said, a few rather administrative problems relating to the monopoly of the country’s electricity company and the development of the required billing software have to firstly be bypassed. Furthermore, Parnass added, the PUA’s introduction of an innovative financial tool that provided assurance to the banks has been incredibly helpful.
“The net metering model is risky in two main aspects: it is dependent upon the electricity tariffs fluctuations, and dependent on the actual consumer who might go bankrupt, leaving the bank/financial institution with no guarantee,” said Parnass.
“So what PUA did, which is innovative and – as far as I am aware unique
and the first of its kind in net metering regulation – is to allow a consumer
to sell the electricity to the grid at a fixed sum set at the point of connection and which reflects the ‘actual electricity production price’ (how much a kW costs Israel’s Electricity Company monopoly to produce it at conventional plants), which today stands at 0.33 NIS. This eliminates the risk of a total loss in case of bankruptcy,” said Parnass.
How this happens exactly, explained Honi Kabalo, head of renewable energy
field at PUA, is to allow the transfer of credit between consumers. Thus, one consumer is able to transfer credit to another and the credit will be offset from his bill. However, in this case of credit transfer, Kabalo said: “The value of credit will be reduced again to the level of retail tariff generation cost only. This option, rather exceptional to a consumer-based regulation, is intended to reduce risks and increase bankability of the renewable energy (RE) systems, by ensuring the possibility to use and refund electricity produced in the RE system even in case of permanent decline in consumption (e.g. factory closed, household consumption declined over the years etc).”
Consumers installing solar PV via net metering currently receive a tariff of around 0.55 NIS, which of course varies according to the installation’s size, but nevertheless “shows that the Israeli solar irradiance is very high and can make solar energy economically feasible,” Parnass concluded.