Basics of Policy, Regulation and Standards of Net-Metering

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Solar power has come a long way since its humble beginnings. Many establishments, companies and even households are embracing solar as their source of energy to power their homes and businesses. It has become so modern that it continues to advance. One of its biggest and most beneficial advancements to consumers is not just the physical structure of the system, but its way of storing and utilizing the energy generated. Net-metering is an electricity policy for consumers who own renewable energy facilities to allow them to use electricity whenever needed while contributing their production to the grid.

Net metering is the first mechanism of the Renewable Act of 2008 in the Philippines which has been implemented. 

On 27 May 2013, the Energy Regulatory Commission adopted ERC Resolution 09, Series of 2013 approving the Rules Enabling the Net-Metering Program for Renewable Energy. This resolution was published on 10 July 2013 in newspapers of general circulation in the country and took effect 15 days thereafter. Thus, the Net-Metering Rules took effect in the Philippines on July 24, 2013. The Net-Metering Program is available only to On-Grid distribution systems (or DUs connected to the transmission grid). 

Net-metering allows customers of Distribution Utilities (DUs) to install an on-site Renewable Energy (RE) facility not exceeding 100 kilowatts (kW) in capacity so they can generate electricity for their own use. Any electricity generated that is not consumed by the customer is automatically exported to the DU’s distribution 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. Net-metering, as defined under Section 4 (gg) of the RE Law, refers only to a system appropriate for Distributed Generation (DG). DG, as defined under Section 4 (j) of the RE Law, as small generation entities supplying directly to the distribution grid, any one of which shall not exceed one hundred kilowatts (100 kW) in capacity.

Solar, wind, biomass or biogas energy systems or other RE systems not exceeding 100kW in power generating capacity, capable of being installed within the customer premises are eligible for net-metering program. DU customers who are in good credit standing in the payment of their electric bills to their DU are also qualified to participate in the Net-Metering Program for Renewable Energy. These customers are referred to in the Rules as “Qualified End-Users” or QE.

Meanwhile, contestable customers getting their power supply from a Retail Electricity Supplier (RES) are not eligible to join the Net-Metering program. This is because the excess electricity received by the DU from the QE can only be distributed to the DU’s other customers, and the credit to be given for the excess electricity received by the DU is equivalent to the DU’s blended generation costs.

The benefit of going into net-metering reduces the amount of electricity that the user buys from their local DU. The rate of savings and avoided cost realized on electricity generated for own use equates to the DU’s retail rate. It consists of charges for generation, transmission, system loss, distribution, subsidies, taxes and other charges. Net-metering makes the user earn peso credits on any excess electricity exported to the DU equivalent to the DU’s blended generation cost, excluding other generation adjustments. The peso credits earned is used to reduce the user’s electric bill. Users can identify the DU’s blended generation for a particular month by accessing its website. DUs are required to publish in their website their monthly generation cost. In that way users can know how much credit they are entitled to on any excess electricity exported to the DU.

DU may opt to install two uni-directional meters to measure import and export  energy. One is to meter energy the user buys from local DU and the other is to meter the energy that the user exports to the DU. The DU may at its option install a single bi-directional meter if it finds it to be more economical. This meter can meter both import and export energy. DU may also install a third meter in proximity to the RE facility to meter its RE generation. The total RE generation shall earn for the host DU RE Certificates which the DU can use to comply with Renewable Portfolio Standards (RPS) obligations.

Availability of net-metering will still incur additional charges. DUs shall impose a net-metering charge to all its customers who avail of net-metering equivalent to their existing ERC-approved supply and metering rate based on the exported energy as registered in the export meter. These charges shall cover the DU’s incremental costs related to system enhancement and additional meter reading and other operating costs. DUs also have the ability to apply  a different schedule of net-metering charges subject to ERC approval after due and hearing. These charges shall prevail until a different schedule of net-metering charges is approved by ERC.

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