End of net metering not a threat to residential solar profitability

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Two major Dutch research institutes, CE Delft and the Netherlands Organisation for Applied Scientific Research (TNO), have conducted a study for several renewable energy associations to assess the impact of scrapping the country’s net metering scheme in early 2027 on residential PV system profitability.

The report suggests that even without the ability to sell excess power to the grid, PV system owners could see unchanged financial returns if they increase their self-consumption rates from around 30% to 60%.

This can be done with a heat pump or charging an electric car,” they said. “But it is important to do this in a grid-friendly way.”

The researchers said that the current payback time for a residential PV system is seven to nine years. Without net metering, this could extend to 12 to 17 years, depending on future grid fees set by Dutch energy providers.

Although the payback period even without netting is still a lot shorter than the lifespan of solar panels, this makes investing in solar panels less attractive for some households,” they explained, noting that the payback time for PV systems without net metering be  between eight and nine years if self-consumption rates exceed 60%.

The researchers cautioned that without incentives for storage technologies, reaching the target for self-consumption would be difficult.

In 2021, Energy Storage NL and Netbeheer Nederland, the Dutch association of electricity and gas network operators, proposed phasing out net metering with a rebate program for storage systems. They said this would help bring battery technologies to commercial maturity in the Dutch market by 2023. They also noted that solar capacity has been growing too fast, causing serious grid bottlenecks, especially in the low-voltage network.

The solar sector did not oppose the proposal. Holland Solar, for example, said keeping net metering would slow long-term growth of rooftop solar. The group supported the proposal but emphasized the need for battery incentive schemes to ensure continued development of the residential PV market.

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