Netherlands to extend net metering to 2023

The Dutch Minister of Economic Affairs Henk Kamp has announced that the net metering scheme for residential renewable energy power generators will likely be extended to 2023.

In a letter sent to the local Parliament, the minister has submitted a possible route towards stimulation of residential solar in the Netherlands beyond 2020-2023, which is based on a study conducted by the Energy research Centre of the Netherlands (ECN) on behalf of the Ministry of Economic Affairs (Ministerie van Economische Zaken).

The study has provided five different scenarios for the future of net metering, and is intended to showcase the effects these would eventually have on tax income levels for the state budget, long-term sustainability of a new scheme, and the relative impact on possible residential market development in years to come.

One of the authors of the report, Marc Londo, who is professor at the University of Utrecht, a senior consultant at ECN Policy Studies and a substantive strategist at the NVDE (the Dutch Association for Renewable Energy), told pv magazine that in all the scenarios presented by the study, self-consumption will remain permitted, and that a new cabinet, which is currently being formed following the elections that were held in mid-March, will have to decide which option to choose among the five alternatives proposed by the research institute.

Under a first scenario (A), which will maintain the current situation and full net metering policy, electricity that is fed into the grid and consumed at a latter stage has the same value, equal to the full consumer price. This means that it does not matter whether electricity is self-consumed directly or first fed into the grid: both have the same value. A second scenario (A1) would allow the maintaining of net billing on the fiscal part of the power price but would allow utilities to pay a price lower than the retail price for electricity fed into the grid, with the the market authority allowing this buy-back price to be 70% of the utility’s retail price.

Under a third scenario (B), the fiscal net metering would be limited to a certain percentage of all electricity fed into the grid and consumed in a later stage. Above this limitation, the value of the produced electricity is only the buy-back price of the utility.

Under a fourth scenario (C), net metering would be fully abolished, both in the utility’s price and in the fiscal part. Instead, the PV owner gets a governmental buy-back subsidy on top of the utility’s buy-back price. A final scenario (D) would envisage that net metering would also be fully abolished, but that the PV owner would get an investment subsidy.

“Net metering will be maintained until 2023,” said Marc Londo, “but thereafter scenarios C and D seem to be the most appropriate instruments to provide a stable incentive for solar-PV in households, balancing the various interests that are at stake.”

According to Peter Segaar, owner of solar website www.polderpv.nl and analyst of Dutch solar market trends, the scheme, in its basic principles, would remain the same as the original mechanism introduced in the new Electricity Law introduced in July 2004. “It is important to keep in mind,” Segaar told pv magazine, “that on average, taxation income by the Dutch State involves over 70% of the variable kWh price in residential contracts (excluding the fixed grid costs for customers with a small grid connection, and also the yearly, fixed energy tax return provided by the Ministry of Finance). This is the main reason why, with the strong residential market (already over 1 GW of capacity by the end of 2015, and this year approaching a level of 1.5 GW), net metering has become a political issue in the public discussions.”

According to official statistics released by the Dutch Central Bureau of Statistics (CBS), approximately 1,051 MW of the 1,515 MW of PV power connected to the grid in the country at the end of 2015 consists of residential PV capacity, 69% of total accumulated market volume. “The exact volume of non-residential net-metering solar installations, however, remains unknown,” explained Segaar.

Other provisional figures released by the CBS in May of this year confirm that Netherlands solar market had its largest growth last year, and that it hit the 2 GW milestone at the end of December.

Newly installed PV capacity for 2016 was approximately 525 MW. This compares to 477 MW in 2015, 302 MW in 2014 and 377 MW in 2013. Cumulative PV capacity installed at the end of December 2016 reached 2,040 MW.