Active consumer and the new Net billing system: does it make sense for enterprises to invest in solar power station?
Already in 2024, the signing of contracts with suppliers under the “Green Tariff” system has been stopped and a new system has been introduced – Net billing. It has successfully fulfilled its function of stimulating the transition to renewable energy sources and it is time to move on. The Law of Ukraine “On Amendments to Certain Laws of Ukraine on Improving the Conditions for Supporting the Production of Electric Energy from Alternative Energy Sources by Consumer Generating Installations” created a self-production model. The concept of an active consumer appears and the Net billing system is introduced. This model works successfully in more than a third of the countries in the world, but it is new for Ukraine.
We will tell how it is beneficial for entrepreneurs, who is an active consumer and how it will change the country’s energy system.
An Active consumer
In regulatory documents, the definition of an active consumer is interpreted as one who is a customer of an energy service; consumes electrical energy; produces, stores or sells it, provided that these types of activities are not professional and/or economic activities.
That is, those enterprises or private entities that install solar power system according to the new legislation, only on the condition of selling the surplus generated energy and offsetting with the energy supply company, become active.
The purchase and sale of energy under the self-production mechanism is carried out in accordance with the contract that the active consumer concludes with the electricity supplier or universal service provider, which is an addendum to the contract on the supply of electrical energy to the consumer.
Why is it beneficial to be an active consumer?
At least because it is energy independence, flexibility to external influence, creation of a new energy market and influence on it. However, the main advantage is that an active consumer consumes electricity at full price, but releases it to the network at the market price, in accordance with a previously concluded supply contract, which, if necessary, can be renegotiated within a month. All players in this market are now competitive and can choose conditions, set prices that are most successful for their own enterprise. The state is no longer an intermediary, so the solar power station owners get a buyer who is interested in buying electricity and, in fact, guarantees the sale of generated energy.
Referring to the Law of Ukraine On Amendments to Certain Laws of Ukraine Regarding the Restoration and “Green” Transformation of the Energy System of Ukraine, it is worth noting that electricity suppliers buy surpluses at free prices.
It’s important. The law allows third-party installations that generate and store energy from alternative sources to be connected to their own electrical networks. Here there is a condition that the installed capacity of these installations should not exceed the permitted one, and the entire volume is purchased by the consumer. The consumer must enter into an energy purchase and sale agreement using the self-production mechanism and acquire the status of an active consumer for this.
What is Net billing?
Net billing is a payment mechanism for excess electricity sold to the chain by an active consumer.
In order to connect to the system, it is necessary to officially put the solar power station into operation, to carry out technical and documentary registration. For industrial consumers, it is necessary to establish an automated system of commercial accounting in order to measure the volumes of produced, consumed and transmitted electrical energy.
The next stage is the signing of the electricity purchase and sale agreement and an addendum to it, where the prices and tariffs are indicated. After connecting to the system, the consumer provides monitoring and accounting of produced and consumed energy.
The electricity supplier performs calculations regularly, once a month. Release to the system is calculated in hryvnias by hourly balancing the cost of the volume of electric energy delivered to the network and its selection from the network, taking into account the cost of transmission and/or distribution services, according to the data of the automated commercial electricity accounting system installed at the consumer’s facility. An active consumer consumes energy at the full price (production, distribution, transmission. all payments), and releases it to the network at a free rate, which is close to the price of the the DAM – “day-ahead” market.
This system has many advantages over the “Green Tariff” specifically for business, but the main one is a significant reduction in the consumer’s electricity costs. That is, the enterprise produces electricity for all its needs, which reduces its financial vulnerability to market price fluctuations, but increases stability and independence.
