Net metering program should be greatly expanded

Solar energy is gaining ground as a viable renewable energy source1 in the Philippines. THE MANILA TIMES FILE PHOTO

EARLIER this month, the Energy Regulatory Commission (ERC) recognized the Commission on Audit (CoA) for its participation in the Net Metering Program, a program through which electricity consumers with their own solar power installations can sell excess electricity they generate to their distribution utilities. While the CoA certainly deserves the recognition, it is unfortunate that this innovative energy-saving program, 10 years after being first introduced, is little-known to the public and has attracted fewer than 8,000 users across the country.

Net metering is a system that uses an electric meter that is capable of operating in two directions. When connected to a building or facility that is connected to the local distribution grid and also has an independent power supply — the current program specifies roof-mounted solar photovoltaic (solar PV) installations — electricity that is generated in excess of the building's needs is transmitted back to the grid. This electricity is repurchased by the distribution utility at an agreed-upon rate, and the amount is deducted from the customer's regular monthly bill.

The savings can be substantial. According to CoA Chairman Gamaliel Cordoba, in just the first nine months of 2022, the commission was able to save P800,000 on its electricity costs. Apart from the financial advantages of net metering and the obvious benefit of solar power being clean energy, the system also reduces demand on the distribution grid, especially since solar installations work at their peak output during the day when overall electricity demand is typically highest.

Despite there being virtually no downsides to the concept, the Net Metering Program has not attracted an impressive number of users. According to the ERC, since its inception in 2013, a total of 7,583 qualified end-users have enrolled in the program; 6,120 of those customers are in Luzon, with 1,168 in the Visayas and 295 in Mindanao.

There are a couple of apparent reasons for this unfortunate lack of usage. First, when it was initially introduced, the program suffered from a lack of attention on the part of the Aquino 3rd administration, which viewed renewable energy with deep skepticism as a matter of policy. Furthermore, for the first couple of years of the program's existence, prices for solar PV installations were still relatively high; the sharp decrease in their costs only began from 2018 onward.

Second, despite ostensibly supporting the program, distribution utilities around the country have pushed back against it, to some degree, presumably concerned about the potential loss of revenue if the program becomes more widespread. As a result of their lobbying, a maximum limit of 100 kilowatts was set for solar PV installations that are eligible for the program. This is problematic, because it discourages larger users — who are more financially capable of installing solar power systems — from joining the program.

And finally, one of the easiest ways to increase the use of the program has been completely ignored by the government. The CoA is an apparent outlier among government agencies, despite mandates during the last three administrations that agencies should prioritize energy conservation. After seeing the good results from the CoA's enrollment in the Net Metering Program, Energy Secretary Raphael Lotilla reportedly recommended to President Marcos back in November that it should be made mandatory, at least where it is feasible, for all government offices and buildings. So far, however, there has been no response to the suggestion from the Office of the President.

The ERC, for its part, has expressed hope that enrollment in the Net Metering Program will increase, but has not suggested any refinements to the program to make it more attractive. We believe that would not be too difficult; issuing the mandate recommended by Secretary Lotilla would be a good first step.

Beyond that, the provisions of the program should be reviewed, particularly the 100 kW limit. There seems to be no practical or regulatory justification for that restriction, and if one cannot be presented, then it should either be raised or eliminated entirely. Other ways to encourage more users to invest in solar installations should be explored as well, such as providing tax incentives or developing a low-cost loan program that will help consumers manage the costs of getting started.

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