Net-metering, through which many households benefited from the production of green energy, can no longer serve its purpose, as the large injection into the grid forces the authorities to cut energy production more and more often, while net billing, which is now in force, is particularly unprofitable compared to what was the case a few years ago.
As a result, homeowners who have invested in residential photovoltaics to meet their electricity needs are essentially watching thousands of euros on their roofs without yielding to the extent they either expected or normally should.
The reason for all this is simple, but with a complicated solution. The absence of a central storage system not only does not allow green energy to be stored as a security for the grid in case of failures during the evening hours, but at the same time results in excess production being thrown away.
The role of net metering
It is no secret, nor surprising, that net metering can no longer serve its purpose, due to the large number of photovoltaic systems and the huge quantities of production in relation to the demand that arises during the corresponding hours.
It is also for this reason that from 2026 those who apply for photovoltaic systems are included in net billing. Of course, this does not mean that the problem has been solved, since those who signed contracts for net metering will continue to produce and be charged with this formula. Each residential contract has a duration of 15 years, so, if someone put a residential one in 2025, they will be included in net billing or any other plan that can be announced until then, in 2040.
What's the difference
The difference between net metering and net billing is in the way it is calculated.
Specifically, in net metering, the number of kilowatt hours produced by your photovoltaic system is offset against the number of kilowatt hours consumed by the system. If, for example, you produced 30 kilowatt hours in one day and you needed 20 kilowatt hours, then not only will you not pay for them, but at the same time you will have 10 kilowatt hours in reserve, which are counted in your subsequent electricity bills. Essentially, net metering uses the grid as an indirect way to store your home production.
On the other hand, net billing does not offset the number of kilowatt hours but their cost. Basically, the price of the kilowatt hour at the time you produced is calculated in relation to the price of the kilowatt hour at the time you pumped from the network, i.e. at night. In this way, several times, if not in most cases, a much higher charge will arise, as when there is an excess of production, prices are humiliatingly low, while at night, with conventional units in production, they skyrocket.
The exceptions and the paradox
It seems that no one is spared from the energy cuts from residential photovoltaics, whether it is a contract with net metering or net billing. Basically, however, almost none, and this is because those citizens who entered into contracts in which ripple control was not mandatory are excluded from the cuts, so there is no possibility of cutting their production through remote control.
According to estimates, before 2020, about 20 thousand residential photovoltaic systems were installed. Today, the numbers reach about 100,000 households, so, essentially, the cuts concern about 70 to 80% of residential photovoltaics, since, as we mentioned above, the approximately 20,000 household consumers are exempt from the cuts.
They pay for the rest
At the same time, in Cyprus about another 350,000 to 400,000 homes do not have a photovoltaic system and this is not only important in the production of green energy. These consumers, due to net metering, indirectly subsidize the 100,000 owners of residential photovoltaics.
As we analyzed above, the offsetting of kilowatt hours and not price, as is the case with net billing, raises the price of the kilowatt hour for everyone, since at night this free energy provided to photovoltaic owners is more expensive than the one they produced themselves during the day. However, this is not the only "injustice".
As far as production cuts are concerned, a paradox arises. These are done whether you are part of the net metering system or net billing. The essential "injustice" lies in the fact that those who have net billing are not enough to pay more at night for the kilowatt hour they produce during the day and inject into the system, at the same time they are subject to cuts, as is the case with those who have net metering, which puts them in an even more difficult position.
In the end, is it advantageous?
At the moment and without a central storage system, everyone loses something, with those who do not have photovoltaics losing the most.
In particular, those who have net metering contracts lose production, so the amortization period of the money they initially gave is extended, those who enter net billing will also have a loss of production and higher bills, so they will pay higher bills and it will take much longer for the system to be amortized than those who entered net metering.
However, those who do not have a photovoltaic system are in the worst position since while they pay the electricity prices at the same time, at the same time, according to the positions expressed by the EAC, they subsidize the rest who have photovoltaics, due to the difference in prices resulting from the production of green energy compared to the conventional one. As the EAC says, the electricity that photovoltaic owners channel into the grid during the day does not have the same economic value as the energy they receive from the grid in the evening hours, which may create costs for the Authority, especially in the case of net metering. However, there is also the opposite position, since many technocrats argue that the electricity produced from green energy at noon at a low price, is finally sold by the EAC to consumers at conventional production prices, so the "subsidy" comes from the pricing policy of the Authority and not from the domestic RES producers.
However, October and the spring months are the worst in terms of cuts for photovoltaic systems.
As for large commercial enterprises, these months they should expect almost daily cuts, while households will see their production lost for several hours and several days a month. There is no easy solution, of course, but those who have installed a photovoltaic system or will install it in the near future should keep in mind that the amortization of their investment will be time-consuming precisely because of these cuts and the change of the system from net metering to net billing.
Now, as far as home energy storage or some systems related to zero export or self-consumption in times of cuts are concerned, these should be evaluated in terms of their cost-benefit ratio for each owner, since everyone has different needs.
