Renewable Energy Bill Features: Netmetering

At the insistence of a friend, I am starting a series of blogs about the Renewable Energy Bill pending in the Philippine Senate. This measure has been around since 1988 and has never been passed into law. We have finally passed in the lower House. Progress in the Senate has been slow because this chamber easily gets sidetracked into other issues.

Anyway, today we talk about netmetering. This is what I can an operational incentive (vs. fiscal) because the benefits come during the operation of the renewable energy facility. This incentive allows for a power consumer to sell excess self-generated power into the grid. It is accomplished by replacing your watthour meter with one that turns back when you generate excess power. Another way of doing it is by adding a second meter that records excess power generated. At the billing date, power generated is credited into one's electric bill (i.e. Cost consumed - Cost generated = bill). Of course, they only credit generation cost.

This incentive has been a key contributor to the success of solar in other countries like the US and Germany. Netmetering reduces system cost by about 40%. I did some calculations and discovered that it also reduces the ROI of a Photovoltaic system from 20-22years to 6-8years. Why? Netmetering precludes the need for batteries gives the extra revenue stream.

The renewable energy bill passed in the Philippine House of Representatives puts a cap of 1% of peak demand in a grid. For Luzon, this would be about 120MW. Why should a law have a quantitive limit, when one can simply put the verbage "subject to technical limititations". (I presented this in the House Technical Working Group and got a concession, only to find it gone in a future version of the bill.GRRR!!!) The speculation is that private distribution utilities are behind this. The Senate version does not have such limit particularly also because of the support of Sen. Juan Ponce Enrile, the father of the Philippine Deregulated Power market. (As a lobbyist, I also learned my lesson here. Never let legislators off the hook. Appreciate the support of Sen's Juan Miguel Zubiri and Edgardo J. Angara and their respective staff.) It is also interesting to note that California initially had the same 1% cap but had this amended to 2% in order to meet the Million Solar home initiative.


Having said all this, it is essential that this measure is passed asap (considering purely technical limitations only). It provides for better access to clean, secure and sustainable power to our people.