Q1. What is net-metering?

A1. Net-metering allows customers of Distribution Utilities (DUs) to install an on-site Renewable Energy (RE) facility not exceeding 100 kilowatts (kW) in capacity so they can generate electricity for their own use. Any electricity generated that is not consumed by the customer is automatically exported to the DU’s distribution 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.

Q2. Is net-metering already available in the Philippines?

A2. On 27 May 2013, the Energy Regulatory Commission adopted ERC Resolution 09, Series of 2013 approving the Rules Enabling the Net-Metering Program for Renewable Energy. This resolution was published on 10 July 2013 in newspapers of general circulation in the country and took effect 15 days thereafter. Thus, the Net-Metering Rules took effect in the Philippines on July 24, 2013. The Net-Metering Program is available only to On-Grid distribution systems (or DUs connected to the transmission grid).

Q3. What is the legal basis of ERC in approving a net-metering program for renewable energy in the Philippines?

A3. Section 10 of the Renewable Energy Act of 2008 (Republic Act No. 9513) provides that subject to technical considerations and without discrimination and upon request by distribution end-users, DUs shall enter into net-metering agreement with qualified end-users who will be installing the RE system. The ERC, in consultation with the NREB and the electric power industry participants, shall establish net-metering interconnection standards and pricing methodology and other commercial arrangements necessary to ensure success of the net-metering for renewable energy.

Q4. Why is there a capacity limit of 100 kW placed on RE systems under the net-metering program?

A4. This is because net-metering, as defined under Section 4 (gg) of the RE Law, refers only to a system appropriate for Distributed Generation (DG). DG, as defined under Section 4 (j) of the RE Law, as small generation entities supplying directly to the distribution grid, any one of which shall not exceed one hundred kilowatts (100 kW) in capacity.

Q5. What types of power generating facilities are eligible for net-metering?

A5. RE facilities such as solar, wind, biomass or biogas energy systems, or such other RE Systems not exceeding 100 kW in power generating capacity, capable of being installed within the customer’s premises, are eligible to participate in the net-metering program.

Q6. What benefit will I get if go into net-metering?

A6. By generating electricity for own use, you reduce the amount of electricity you buy from your local DU. The rate of savings (or 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.

You also earn peso credits on any excess electricity exported to the DU equivalent to the DU’s blended generation cost, excluding other generation adjustments. The peso credits earned is then used to reduce your electric bill/s.

Q7. How will my DU meter my import and export energy?

A7. The DU may opt to install two uni-directional meters – one to meter energy you buy from your local DU, and the other to meter the energy you export to the DU.

The DU may at its option install a single bi-directional meter that can meter both import and export energy if it finds it to be a more economical.

The DU may also install a third meter in proximity to your RE facility to meter its total RE generation. The total RE generation shall earn for the host DU RE Certificates which the DU can use to comply with its Renewable Portfolio Standards (RPS) obligations.

Q8. Who are qualified to participate in the net-metering program?

A8. DU customers who are in good credit standing in the payment of their electric bills to their DU are qualified to participate in the Net-Metering Program for Renewable Energy. These customers are referred to in the Rules as “Qualified End-Users” or QE.

Q9. If I am a contestable customer getting my power supply from a competitive Retail Electricity Supplier (RES), am I qualified to participate in the net-metering program?

A9. No. Only distribution end-users (or captive customers) or contestable customers who opted to remain with their DU are qualified to participate in the net-metering program. This is because the excess electricity received by the DU from the QE can only be distributed to the DU’s other customers, and the credit to be given for the excess electricity received by the DU is equivalent to the DU’s blended generation costs. Contestable customers getting their power supply from an RES are thus not eligible to join the Net-Metering program.

Q10. If I am a customer directly-connected to the transmission grid, am I qualified to participate in the net-metering program?

A10. No. Customers directly-connected to the transmission grid are not DU customers but are transmission load customers of the National Grid Corporation of the Philippines (NGCP).

Q11. How do I determine the DU’s blended generation cost for a particular month?

A11. DUs are required to publish in their websites their monthly generation cost. You only need to access your DU’s websites to get the blended generation cost of your DU for a particular month so that you will know how much credit you are entitled to on any excess electricity you export to your DU.

Q11. How do I determine the DU’s blended generation cost for a particular month?

A11. DUs are required to publish in their websites their monthly generation cost. You only need to access your DU’s websites to get the blended generation cost of your DU for a particular month so that you will know how much credit you are entitled to on any excess electricity you export to your DU.

Q12. Please give an example of a DU’s blended generation cost, say for the billing month of November 2013?

A12. Using Meralco’s generation costs for November 2013 (as downloaded from its website), its blended generation costs, excluding other generation adjustments, for November 2013 is highlighted in yellow (see table).

Q13. Will I incur additional charges if I avail of net-metering?

A13. Yes, DUs shall impose a net-metering charge to all customers who avail of net-metering equivalent to their existing ERC-approved Php/customer/month supply and metering rate based on the exported energy as registered in the export meter. This net-metering charge shall cover the DU’s incremental costs related to system enhancement and additional meter reading and other operating costs.

The DUs may also apply before ERC a different schedule of net-metering charges subject to ERC approval after due notice and hearing. Meantime, the net-metering charges cited above shall prevail until a different schedule of net-metering charges is approved by ERC.

Q14. Please give a simulation of how my electric bill would look like if I am a net-metering customer with a 2kW solar-powered facility installed on my roof top?

A14. See assumptions and simulated electric bill below:

Q15. Are all customers ideal candidates for net-metering?

A15. Not all DU customers are ideal candidates for net-metering. Customers with demand-related (kW) charges may not be ideal candidates for net-metering because net-metering displaces only energy related (kWh) charges.

Be that as it may, customers whose peak demand of electricity coincides with the availability of the RE resource may also stand to benefit from net-metering even if he has demand-related (kW) charges. This is because his RE production can potentially reduce his coincident peak demand for electricity.

Q16. Who then would be ideal candidates for net-metering?

A16. Customers with pure energy-related charges will benefit from net-metering.

As mentioned above, customers whose peak demand of electricity coincides with the availability of the RE resource may also stand to benefit from net-metering even if he has demand-related (kW) charges because his RE production can potentially reduce his coincident peak demand for electricity.

Q17. What is the optimum size of an RE facility should I install in my premises?

A17. If you consume all of your RE production, you avoid 100% of the retail rate of your electric bill.

If you export any excess RE to your DU, you only offset the blended generation cost (or weighted average power production cost) of your DU. This is about 40-45% of the retail rate of your electric bill.

So for an RE facility like a solar roof top system, the optimum capacity that you should install in your premises should not exceed your daytime peak demand for electricity so that you can maximize your savings/avoided cost on electricity, and shorten to the extent possible the payback period of your investment in the solar roof top facility.