Saving money efficiently with solar energy

The Department of Energy launched in 2013 the net-metering scheme under the Philippine RE Act of 2008 in an effort to give consumers a means to be more in control of their electricity. In simple terms, Net-metering lets a homeowner control his own electricity bill, by receiving—and giving back—the power of the sun. Qualified residential and commercial consumers are allowed to install an on-site RE (renewable energy) facility, such as solar panel rooftop installations, not exceeding 100 kilowatts (kW) in capacity to generate electricity for their own use.

Early this year, the first Solar Power System with BI-Directional Net Metering was installed in the country. The solar technology of Meister Solar Power Philippines was installed at the home of Tom Thomas in West Grove Ayala in Sta. Rosa, Laguna. Thomas opted to have an 8.64 kWp Solar Power System in the hopes of lowering his electric bill.

[caption id="attachment_153578" align="aligncenter" width="576"] West Grove Ayala resident Tim Thomas installed in his home the country’s first Solar Power System with BI-Directional Net Metering technology.[/caption]

While an initial cost will be needed to install the solar panels, the long-term benefits will outweigh the upfront investment. “Consider this: when we buy a big-ticket item like a car, a big appliance or a house, most of us avail of financing terms, i.e. making a down payment and paying the balance on a monthly basis,” says Thomas. “In net-metering, you’ll also have to shell out money. However, instead of depreciating value, one will experience benefits that will grow over time. Once the investment costs for your own RE system are fully recovered, savings on the monthly electricity bill will ease the budget burden of homeowners. As early as one month since a Solar System was installed in our home, we already noted a decrease in our electricity bill,” he reports.

To help consumers in fully understanding the net-metering concept and the ways to maximize its benefits, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), through the “Renewables – made in Germany” initiative, facilitated a joint cooperation of the Department of Energy (DOE), the National Renewable Energy Board (NREB) and other contributors to publish the “Net-Metering Reference Guide.”

According to the guide, net-metering is two-pronged: first, generating own electricity via a renewable source such as solar energy, and second, feeding the excess electricity to the local distribution grid, with the ultimate goal to offset consumption and cost.

In addition, any electricity generated that is not consumed by the customer will automatically be exported to the distribution utility’s (DU) system. The DU then gives a peso credit for the excess electricity received, equivalent to the DU’s blended generation cost, excluding other generation adjustments, and deducts the credits earned to the customer’s electric bill. The rate of savings, otherwise known as avoided cost, realized on electricity generated for own use, is equivalent to the DU’s retail rate consisting of charges for generation, transmission, system loss, distribution, subsidies, taxes and other charges. This, added to the peso credits earned on any excess electricity, translates to every homeowner’s dream: a lower monthly bill.

For a clearer appreciation of how the system benefits consumers, the reference guide simulated an electricity bill of a net-metering customer with a 2 kW solar-powered facility installed on a rooftop. With that capacity, the customer will be able to produce 230 kWh monthly. Assuming he would use 60 percent (138 kWh) of this production for own use and export the remaining 40 percent (92 kWh), the avoided cost from generating own electricity is estimated at P1,737.93 while the credit earned from excess electricity is P506.43. This translates to a total savings of P2,244.36 per month.

What’s more, saving from your electricity bill also translates to saving the planet. If you think going green, reducing carbon emission and being eco-friendly are tasks that are too big for any individual, think again. As a homeowner, you have a hand in the growing energy crisis and global warming and can take steps to make a change. Installing solar panels in your home can be part of your small step.

“Think of it this way—getting payback from your electricity bill is your short-term investment. Reducing your carbon footprint will be your long-term investment—one that will benefit your children’s and grandchildren’s future,” says Hendrik Meller, GIZ chief advisor.

The Net-Metering Reference Guide is available for free download here: