Net metering to be introduced in Serbia – political decision needed to tap into solar power

The Serbian Ministry of Mining and Energy intends to prepare the required regulatory framework for the introduction of net metering, which will enable a greater use of solar energy in households and an increase in the number of prosumers, representatives of the ministry said during the presentation of the study on the introduction of net metering for electricity consumers in Serbia, prepared by the USAID. The introduction of the model depends on the decision-makers’ assessment of whether Serbia needs more renewable energy.

While Serbia is preparing to take the first steps in introducing net metering, which is a precondition for increasing quantities of solar energy generated by citizens for their own needs, but also for selling surplus energy to the grid, the EU is doing everything it can to ease the procedures as much as possible to enable citizens to increase the use of renewables and reduce greenhouse gas (GHG) emissions.

A review of models used by other countries as well as their experiences is part of the USAID study which also provides a detailed explanation of the benefits of introducing net metering, a list of regulations that need to be changed, and who is in charge of it, as well as an example of electricity costs with and without net metering.

The decision depends on the answer to the question of whether Serbia needs large amounts of renewable energy – Banjac

After the presentation of the study at the 6th international fair and conference RENEXPO 2019 at the Belexpo Center in Belgrade, Miloš Banjac, assistant energy minister in charge of renewable energy sources and energy efficiency, said that the study was sent to public utilities in order to get their feedback, and that it will be posted on the ministry’s website, to enable all interested stakeholders to provide their opinions.

He hopes that the regulatory framework for net metering will be adopted by the end of the year or a few months later, noting that the final call is up to politicians.

Their decision on this depends on the answer to the question of whether Serbia needs large amounts of renewable energy, Banjac added.

A prosumer in the EU doesn’t need authorization to connect to the grid

On the other hand, in December 2018, the EU adopted the revised RES Directive which introduces a simple notification procedure for all new installations with a capacity of up 50 kW instead of authorization procedures to obtain a grid connection.

Now a prosumer doesn’t have to ask for authorization to connect to the grid upon rooftop solar installation, but only needs to inform the distribution company about its connection to the grid. The company has a deadline of one month to react – and if it doesn’t give approval, it is considered that the prosumer received the authorization.

Dejan Stojadinović, one of the four USAID consultants who are the authors of the study, explained the concept of prosumers, which implies the self-generation and self-consumption of renewable electricity mainly in households by rooftop solar, while the surplus electricity is sold to the distribution grid.

The two-way meter records the delivered electricity, and self-generation and the energy taken from the distribution network.

When a household does not produce electricity – it takes it from the distribution network, Stojadinović said.

The calculation showed that a household with an average consumption of 360 kWh per month (4,320 kWh per year) pays EUR 348 annually. If this consumer installs a 3 kW rooftop PV solar system, the bill is EUR 164 with savings amounting to EUR 184. And, it would also generate revenue from the sale of surplus – EUR 11, expanding the household budget to EUR 195.

Benefits

According to the study, the main benefits of introducing net metering for prosumers are:

• Lower electricity bills
• Possibility to generate revenue – from selling surpluses
• Contribution to climate change mitigation and renewable energy uptake

Gains for the state:

• Increased use of renewable energy sources
• Reduction of GHG emissions
• Reduction of investments in large power plants
• Security of supply through distributed generation.

The tax regime could be a problem, but if there is a will, all problems can be solved – Stojadinović

Advantages for the power distribution companies:

• Reduction of distribution losses
• New business opportunities
• Increased security of supply.

Regulatory activities for the introduction of net billing

In order to experience all these benefits, it is necessary to change certain laws and implementing regulations. The importance of the regulatory framework can be seen in the case of the tax regime which is the reason why in some countries net metering was not introduced.

That is true, but if there is a will, all problems can be solved, Stojadinović said.

All in all, the Ministry of Mining and Energy has to change the Law on Energy and adopt by-laws, which will define the categories of prosumers, as well as the duties of all parties involved in the introduction of net metering in Serbia – the Energy Agency of the Republic of Serbia  (AERS), the distribution system operator (DSO), and a decision on introduction advanced measurement systems.

The Ministry of Construction, Transport, and Infrastructure must change the Law on Planning and Construction in order to simplify the permitting procedures, the Ministry of Finance must change the Law on VAT and the Law on Excise Taxes in order to define the tax bases for net metering, as well as the excise treatment of generated electricity, and the AERS should change the existing methodologies for determining the costs of the price of connection to the power distribution system, and for determining the price of access to the power distribution system.

Finally, DSO EPS Distribucija must change the distribution code in order to define the technical requirements for distribution grid connection, as well as to implement smart meters rollout.