Green light for net-metering in Zimbabwe

Statutory Instrument 86 of 2018 which details Zimbabwe’s Electricity (Net-metering) Regulations was gazetted earlier this week. It is a step in the right direction for the Zimbabwean energy sector and the document provides information about how net-metering is going to be implemented, as well as details about the application procedures and conditions of compliance for prospective participants*. I believe the document is clear enough in that regard so I will not be gravitating in that direction. Instead, my main focus here will be on what I think is worth noting pertaining to net-metering, for the benefit of those seeking to understand the incentive a bit better.

*Participant : residential, commercial or industrial customer that generates electricity on the customer’s side of the billing meter from a renewable energy source that is primarily intended to offset part or all of the customer’s electricity requirements.

What is net-metering?

Net-metering, see infographic below, is a billing arrangement under which excess electricity generated by a participant is fed into the distribution grid. In return, the participant earns credit, which is then used to offset the amount of electric energy he draws from the grid within that particular billing period. The participant will, therefore, only be liable to pay for the difference between what he feeds into the grid and what he draws from the grid, i.e. the net energy import.

Net-metering infographic

How is it evaluated?

The importing and exporting of energy to and from the grid is monitored by bi-directional meters. The meters typically ‘run’ in the one direction for all energy imports and in the other direction for all energy exports. If you have ever heard of ‘spinning (or running) the meter backwards’ with reference to net-metering, this is why.

The regulations for net-metering in Zimbabwe will, however, work, not on a 1-to-1 basis (i.e. import and export both at retail rate), but 1-to-0.9 (i.e. import at retail rate but export at 10% below the retail rate). This means that the net energy imports will be calculated as:

Net_import = 1*U_imported – 0.9* U_exported ,

where U_imported and U_exported refer to imported and exported energy units, in kWh, respectively.

What are the benefits of net-metering?

Net-metering is generally regarded as one of the best renewable energy incentives out there, and this is why:

· Net-metering incentivizes the adoption and use of electricity from renewable energy sources. This is good for reducing carbon emissions and also improves the country’s energy mix.

· Participants gain from the returns on the excess electricity that they produce and feed into the grid, allowing them to realize more tangible short term rewards and shorter payback periods on their renewable energy investments.

· The feeding of excess energy into the grid also eases the pressure on utilities to meet and cope with energy demands. This can lead to the reduction, in both frequency and duration, or even a case where we will not need to employ demand management measures such as load shedding and energy importation from other countries.

· Feeding excess energy into the grid also might help reduce (would-be) participants’ need to rely on battery storage. This is because another way of looking at net-metering is as a system where you can lend the grid some of your excess energy when you do not need it, reclaim it when you do and then only pay the utility if you go over and above what you would have contributed to the grid initially. With the costs of batteries in mind, net-metering seems to offer a great alternative from this perspective.

· Another possible benefit of net-metering is that it leads to more awareness with regards to energy consumption which usually leads to efficiency; as the saying ‘if you can’t measure it, you can’t improve it’, suggests.

This is not to say that net-metering does not have any downsides at all. In fact, a common argument against it is that it tends to force utilities to buy electricity from net-metering participants at ‘artificially high rates’ which in turn drives up energy costs, to the disadvantage of non-participants. This, however, apparently becomes more pronounced once the percentage penetration of renewables reaches a certain threshold, in which case alternative rates and compensation mechanisms might need to be implemented. A look into these alternatives perhaps warrants a separate conversation. For now, we acknowledge and celebrate net-metering as a significant milestone for Zimbabwe’s energy sector.

#renewableenergy #netmetering #Zimbabwe #grid #electricity