Net-billing - settlement rules for prosumers with photovoltaic installations registered from April 1, 2022.
What is net-billing? Net-billing is a way for a prosumer to settle the electric energy produced by a photovoltaic installation that they have not consumed in real-time.
This is the simplest definition, which, in reality, doesn't explain much about settling excess energy production.
Before we explain the net-billing system, we need to mention fundamental goals of the new prosumer, who opts for a micro photovoltaic installation because they are different from prosumers before April 1, 2022.
Aside from the significant ecological aspect, which is not the focus of this article, photovoltaics currently have the following goals for prosumers:
INVESTMENT GOAL – considering the current interest rates on deposits, inflation, currency fluctuations, and stock market changes, it's one of the more secure investments that yield monthly profits from the perspective of the next several decades.
FINANCIAL SECURITY GOAL – a micro photovoltaic installation significantly reduces the fixed cost of electric energy, which is sharply increasing in price. Currently, electricity prices for households are reduced by excise tax (effective from January 1, 2022, to May 31, 2022) and a reduction in VAT rates from 23% to 5% for household electricity until the end of March 2022.
The sum of these two previous goals, i.e. SAVINGS GOAL – a photovoltaic installation is a private power plant for prosumers, covering part of their current energy needs and allowing them to earn extra by selling some of it to the utility company to offset the energy they will need to purchase.
These are the most important goals, with additional ones being: energy security, energy awareness, and environmental considerations.
Photovoltaic Installation - Profits from Two Areas
The owner of a photovoltaic installation registered from April 1, 2022, will have to focus on two profit components from microinstallation production.
PHOTOVOLTAIC INSTALLATION PRODUCTION = SELF-CONSUMPTION + SALE OF OWN ELECTRICITY
Self-consumption
Self-consumption is the electricity we use during the installation's operation (typically during the day).
For profitability calculations , self-consumption is treated as electricity that we would have to buy from an energy supplier if we didn't have a micro photovoltaic installation.
Maximizing self-consumption has a significant impact on the profitability of the installation. Typically, installation owners used about 20% of the electricity generated immediately. The new prosumer aims for a result of about 40% or even higher.
This can be achieved by using devices that consume the most electricity during the installation's operation (washing machine, dishwasher, water heaters, electric heating, cooling devices, iron, electric/induction cooker).
Additionally, it's now possible to control multiple devices through a mobile application even when you're not at home, making it easier to achieve this goal.
Electricity from self-consumption is exempt from VAT and excise tax, unlike the electricity that needs to be purchased. Therefore, it's crucial for most of our electricity needs to come from self-consumption.
This doesn't mean artificially increasing your electricity consumption, like turning on heating in the summer to boost self-consumption. It's more about optimizing device usage, like running the dishwasher during the day when the installation is generating power rather than in the evening.
Sale of Own Electricity
A company buying and simultaneously receiving excess electric energy from a prosumer settling in the net-billing system will be obligated to maintain a prosumer account (individual).
The prosumer account will be used to settle the excess energy received from the prosumer. These excesses are referred to as prosumer deposits (energy converted into currency is deposited into the account and reserved solely for future energy consumption).
The energy in the prosumer account will be settled according to the Next-Day Market (RDN) price from the previous month.
The funds saved this way in the prosumer account will be valid for 12 months (assuming that when we buy energy from these funds, the oldest funds are always withdrawn).
If a situation arises where 12 months pass , and we still have "expired" funds in the account, they will be considered overpayment, subject to reimbursement within no longer than the end of the 13th month following the given month.
The amount of the reimbursed overpayment cannot exceed twenty percent of the value of electric energy introduced into the grid in the calendar month to which the overpayment refund pertains.
Such a solution will allow for the exemption of income from this overpayment from taxation under personal income tax , following the recommendations of the European Commission. A higher income level would have to undergo a public aid notification procedure.
Purchase of Electricity
Electricity drawn from the grid reduces the value of the funds accumulated in the prosumer account.
Net-billing. Implementation stages
STAGE I (01.04.2022 – 30.06.2022)
Settlement based on the previous discount system, and at the end of the surplus energy period, the settlement will be based on the average monthly price from June 2022.
The funds will be deposited into the prosumer's account. Then, the prosumer will move on to the next settlement stage.
STAGE II (01.07.2022 – 30.06.2024)
Excess electric energy sent by the prosumer will be settled based on the average electricity price from the previous month in the Next-Day Market (RDN) (available on the website of www.tge.pl).
STAGE III (since 01.07.2024)
To settle the surplus electricity with the utility company, dynamic tariffs based on hourly prices will be applied, along with separate settlement for energy introduced into the grid and drawn from the grid..
The value of the electric energy provided by the prosumer will be determined based on the hourly price from the Next-Day Market.
The one responsible for setting the price is the operator of the public information market (PSE - Polish Power Grids), which currently carries out this task under the law.
In summary, the new prosumer will now have to increase their energy usage awareness and maximize self-consumption.
The net-metering (discount) system is already history for new prosumers. But net-billing is a solution that offers the possibility of savings, combating annual increases in energy prices, and engaging in environmental protection.
Read also: My Electricity 5.0. Rules, eligibility, subsidy amounts..
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