Net metering: Struggling to take off with trimmed wings

Global warming and all the hazards associated with it have prompted the world to reduce its carbon emissions. Renewable energy sources have been around for a long time. Even Bangladesh boasts the second-highest number of people – 17 million – in the world who avail of electricity from more than 5.8 million solar home systems.

However, the panels used in these systems have often been of low capacity, just 20 watts, as solar panels used to be expensive.

Luckily, the price of solar panels in Bangladesh has dropped by 50 percent in the last decade. Yet, installing large solar power plants remains problematic for the densely-populated, agriculture-based small country that Bangladesh is. Installing a one megawatt plant requires three-to-four acres of land, which leads to loss of vital farmland while raising costs.

Using rooftops instead is thought to be a good alternative.

To encourage homeowners to use their rooftops for solar energy production, the government has introduced a net metering system. A draft guideline was formulated in early 2018, and after receiving feedback from various stakeholders, a final guideline was enacted in August the same year. It was revised in November 2019.

Net energy metering (NEM) refers to a policy mechanism that allows customers – dubbed prosumers in the guideline – to integrate their renewable energy systems into the distribution grid. A grid tie inverter is used in this system which converts the DC current – produced by the renewable energy source – to AC, and supplies it to the home or factory.

Any excess electricity after self-consumption is supplied to the grid via a bidirectional meter which keeps records of energy import and export – reducing electricity bills at the end of the month. If the prosumer produces more electricity than the individual consumes in a year, the individual is entitled to the price of the net amount of exported electricity.

Such a user is called a net energy exporter.

A rooftop solar system in Dhaka. Photo: Noor A Alam/TBS

Now, there is a dilemma with grid tie inverters. These are designed to shut off during power outages. In smaller towns, or rural areas in the country, where power outages are common, people do not like the idea of a solar system that does not work during an outage. So, grid tie inverters are more useful in cities like Dhaka with less frequent outages.

Then again, not many people are thought to be interested in investing in solar-powered systems while the national grid is providing nearly uninterrupted electricity. Yet, there are NEM users, because the financial benefits are not negligible. The investment can return in five years time, while the system continues to produce electricity for 20 or more years. Currently, there are 876 NEM systems installed in the country with a capacity of 12.8 MW, which is nowhere near its potential.

There are some restrictions in the guideline that discourage many NEM enthusiasts. According to the NEM guideline, only three-phase electricity consumers are eligible for the net metering system. This effectively excludes single-phase consumers – the largest part of grid-connected consumers.

Another restriction imposed by the guideline is that the output AC capacity of the renewable energy converter can be a maximum of 70 percent with respect to the consumer's sanctioned load. Also, the maximum output AC capacity of the installed renewable energy system for NEM cannot be more than 10 MW.

Moreover, if the distribution utility has to upgrade its system in order to integrate renewable energy, the NEM applicant will have to bear related expenses.

Asked why single-phase users are not eligible for net metering, Mohammad Alauddin, additional secretary of the Power Division, explained, "we are still at an experimental phase; we do not know how the grid will behave if a large number of prosumers are involved. Variable renewable energy sources destabilise the grid."

Regarding not allowing the prosumers to produce more than 70 percent of their sanctioned load, Mr Alauddin said it was done because otherwise consumers would start selling power.

When asked if this condition was set to protect the interest of power companies, he said that the government did so to strike a balance. "We had to consult with every stakeholder – power companies included," the top official explained.

The government has a stated target of ensuring a 10 percent renewable energy in the total energy mix by 2020. It is just below two percent now. Asked how these restrictions are helping attain the target, Alauddin said that the NEM guideline is a living document, and it is subject to change. The government shall be continuously developing it based on experience and people's recommendations. These restrictions might be lifted in future.

TBS talked to a number of other officials across the energy authorities. A power development board official observed that the power produced at commercial plants will remain unused if a capacity ceiling is not placed for net meter users. He also indicated that putting a billing system in place for net exporters will be a complicated process.

Another official said that unlike the three-phase meters, single-phase meters available on the market are not re-programmable, therefore they cannot be turned into bidirectional meters essential for net metering. Of course, he answered in the affirmative when asked if programmable meters could be imported and introduced to facilitate net metering for a wider range of users.

Another official involved in formulating the NEM guideline cited technical issues that cause an imbalance in the grid when variable renewable energy sources are integrated into it. He said distribution companies had objected to the idea of opening up NEM for every grid-connected consumer because of potential instability on the grid. When asked, he said that there is currently no initiative to upgrade the network's adaptability capacity as it is very costly. The official admitted that most of the distribution company staffers are unaware of net metering systems – something that this correspondent felt during his visits to several distribution offices in the capital.

A short survey of the solar market in Gulistan and Nawabpur revealed that the importers and sellers are also unfamiliar with grid tie inverters. One seller had heard about net metering, but was unaware that the system has already been launched. Others do not have any clue about it. A handful of large solar suppliers, mostly the partner organizations of IDCOL – a company established by the government to finance renewable energy projects – allegedly enjoys the lion's share of the net metering market. However, the power distribution companies responsible for implementing NEM denied that the sector employs monopolistic practices.