NET-METERING

NET-METERING

How it works:

Net-metering is a method that offset the amount of electricity imported from the grid to the premise against the electricity generated from the PV system and exported to the grid. The energy generated from the PV system is consumed locally on-site and any surplus that has not been used is transferred to the following two-month billing period. Any deficit is billed, within that billing period. The final cleaning will be stated on the last bill of the financial year (February –March). Any surplus may not be transferred to the next billing year.

What should be taken into account during the estimation of the size of the PV system?

In order to select properly the size of the PV system that will be installed the annual consumption of each premise, as well as the expected electrical production of the PV system, which will be calculated using simulation programs for that specific area, must be taken into account. It is very important to calculate correctly the size of the PV system, in order to satisfy the real electrical needs of each premise. A PV system with greater output power than the required will not benefit from the additional production during the yearly account reconciliation that takes place in the February – March billing period. On the other hand, a PV system with less output power than the required, will not lead a satisfactory reduction of the electricity bill and energy saving. Therefore, energy study must be undertaken in order to find the optimal and most efficient solution that suits the customer's consumption profile.

For premises with a single-phase electric power, a single-phase PV system with a power output of up to 4.16 kWp can be installed. For premises with a three-phase electric power, a single-phase PV system with a power output of up to 4.16 kWp or a three-phase PV system with a power output of up to 5.20 kWp can be installed.

Where can such a system be installed and how much surface area does it need?

A net-metering PV system can be installed on flat or inclined roofs of existing legitimate -constructed buildings or in the plot in which the consumer’s premises are. Attention must be placed on the choice of the installation area of the PV modules to avoid any shading, especially during the hours of 9 a.m. to 3 p.m.

For the installation of 1 kW PV system on inclined roof, with PV modules size 1.64 m x 1.00 m, a net surface area of about 7 m2 is required. Thus a 3 – 5 kW PV system requires 21 m2 and 35 m2 respectively.

For the installation of 1 kW PV system on a flat roof, with PV modules size 1.64 m x 1.00 m, a net surface area of about 14 m2 is required. Thus a 3 – 5 kW PV system requires 42 m2 and 70 m2 respectively.

What is the cost of the PV system and what are the annual savings?

The energy produced in Cyprus from 1 kW PV system is estimated at 1650 kWh per year. From PV projects we have already installed in Cyprus we have seen that, in many cases, the energy produced is much higher. Examples of energy savings from 3, 4 and 5 kW PV systems for their first year of operation can be found in the table below.

 

PV system

Indicative cost of PV system (€)

Annual energy production (kWh)

Annual savings

(€)  (0.19€/kWh)

Annual fee to EAC (€)

Net annual profit (€)

Amortization of the PV system (years)

3 kW

4,500

4,950

940.5

185.22

755.28

6

4 kW

6,000

6,600

1,254

246.96

1,007.04

6

5 kW

7,500

8,250

1,567.5

308.70

1,258.80

6

*The annual fee to EAC is subject to change.

The lifetime of a PV system is far longer than 20 years. The PV modules have a 12-year product warranty from the manufacturer and warranties of up to 25 years for performance. The PV inverters have a 5-year warranty that can be extended to 10 - 20 years or to 12 years of warranty depending on the type of inverter. The mounting systems have a 20-year warranty. All the electrical equipment used also has warrantees. The 6-year amortization, in relation to the life of the PV system, is considered a very good period for the amortization of the investment.

What is the process for licensing/approval and for the operation of the PV system?

We undertake the whole procedure of licensing for the PV system. The applications are submitted to EAC as a Distribution System Operator (DSO). Upon the submission of the application, applicants will pay the required fee of €250 + VAT, which reflects the cost of handling the application by the DSO, the cost of the meter, the cost of the inspection and the connection to the grid. Within 7 working days the DSO shall issue its decision to approve or reject the application. If the application is rejected, €200 + VAT is refunded. Upon receipt of the approval from the DSO, the net-metering contract is signed on the spot. The applicants will have to complete the installation, the inspection and the connection of the PV system within 3 months of obtaining the approval from the DSO.

RESIDENTIAL PV SYSTEMS:

Any individual, who has been a permanent resident in Cyprus for 6 consecutive months and is the owner of the household where the PV system will be installed or has the written consent of the owner of the residential unit, has the right to apply for a household PV system. The applicants for residential PV systems must be listed in tariff code 1. The consumers who are listed in any other tariff must be transferred to tariff code 1 before their application.

The net-metering contract between EAC and the consumer/producer for production/consumption is valid for 15 years. The contract is renewed at the end of the contractual period in accordance with the relevant legislative framework at the time.

In cases of residential consumers net-metering may also take into account the electrical consumption of storage heaters that operate in the home based on their off-peak pricing. The final net-metering reconciliation will take place once a year with the last bill of each 12-month clearing period (February-March account). Any surplus electricity from the PV system will be transferred to the account of the storage heaters and will be deducted from their electricity consumption.

This category also includes beneficiaries of grants; any individual falling in the category of vulnerable consumers as defined by the relevant order of the Ministry of Energy, Commerce, Industry and Tourism has the right to apply for a grant for a household PV system. Successful applicants for the grant will receive a once-off sum of € 900 per kW installed, with a maximum fund of € 2,700 per system and per beneficiary.