Gross and Net Metering, and Feed-in Tariff Changes

In recent times, a number of people have asked for clarification about the effects of Gross and Net metering, and changes to feed-in tariff. This follows a number of reports in newspapers and information sources such as the RENEW ECONOMY of the effects of rules changes. Below is a simple take of the what.

 

In NSW, from 31 Dec 2016, around 160,000 electricity customers will be disadvantaged if they do not switch from gross to net energy metering, and it is estimated only around 85,000 would have switched in time. The question gets down to: What is driving the changes and what are the actual changes that need to take place too.

 

First thing to understand is on-site meter changes can take less than 1 hour. What complicates things is a new Chapter 7 of the National Electricity Rules, and the regulations for new metering businesses that will spring up as a result. Will the customer benefit or will it just cost them? The evidence is retailers will benefit from continuing to ‘own’ the customer, and the customer will pay for the ‘privilege’. So customers that own their Solar panels will be less disadvantaged than those still paying them off, etc. Chances are all will pay more.

 

What is the difference between gross and net metering?

 

The gross-metered scheme means the entire output of the inverter is metered, and the total energy consumption at the premises is metered by the flat-rate or time-of-use meter.

 

With net metering, the output of the inverter is combined with the general load of the premises, ‘behind’ the consumption meter. This meter now needs to measure both energy import (consumption) and export (feed-in) in separate registers.

 

Some meters already the capability, and do net metering now, or can be reprogrammed. Some meters need to be replaced, as they are not capable of measuring power flows separately.

 

You now know meters and there capability is one thing. But, there is more:

 

To change from a gross feed-in tariff to a net scheme, three things need to be addressed: switchboard and general wiring, a potential meter change and ‘the’ tariff change.

 

You need to pay an electrician to look at the wiring in the switchboard, and the wiring change is generally straightforward. Budget the work to cost from $200. The wiring change likely is to disconnect the power from the inverter to the gross meter and move the wire to the part of the switchboard that feeds the general light and power circuits. This then becomes a ‘behind’ the existing consumption meter connection. The meter now functions as the net energy import and export meter.

Also at this point, after a final meter reading the old meter is removed from the meter panel and returned to the network distributor company, or whoever owned the meter.

 

The metering rules and regulations

 

In most cases it only takes minutes to physically remove, change or reprogram a meter.

However, the rules and regulations have changed. With change comes with it complications that include who owns the meter, who can do the work and what type of net-meter is used.

No longer do network businesses exclusively own the meter of residential and small business connections. No longer are Accredited Service Providers (ASPs), authorised by the distributors to install and change the meters. The former system was efficient and effective for the installation of the gross meter when all that needed was a contractor to make the wiring change and change the meter all in one visit with one authorisation.

Chapter 7 of the National Electricity Rules changes (the chapter concerned with the metering) guides that the electricity retailers have a lot more involvement in who supplies and reads the meters on a small customer’s premises. The change also has lead to a number of retailers now owning metering businesses themselves. The world of metering for small customers is no longer the exclusive realm of the distributor.

Also complicating things is that the vast majority of the existing meters out on smaller sites are the ‘accumulation’ meters (flat rate and time-of-use metering that is generally read quarterly) will stay with the distributor. However many of the new ‘smart’ meters will come those retailers with close links to the new meter companies. Also complicating the situation is those retailers that do not own metering businesses will continue to rely on the distributors or other accredited meter providers to carry out the metering work.

 

The tariff change

 

The change is due to the closure of the solar bonus scheme, under which households with solar panels can sell electricity back to the grid at a rate of either 60¢ or 20¢ per kilowatt hour.

From December 31, that amount is set to plummet to around 6¢ per kilowatt-hour as the scheme closes ‘as planned’.

This leaves the households potentially selling electricity to the grid for 6¢ per kilowatt hour but being forced to buy it from their retailer for around 30¢ kWh

Smart meters are required for customers to switch from gross metering – the current situation – to net metering, so they can potentially power their households with solar panels and sell any excess back to the grid.

 

How the meters are read

 

All meters are read, either manually or remotely (smart meters can be read remotely) by a meter data agency, the readings are then published to the Australian Energy Market Operator (AEMO). From there, both the distributor and the retailer can access the readings for writing up your bill. Some bills are bundled (a lump sum covers the retail and network transport cost), some unbundled (all costs are transparent).

What is different in a net-metered bill is there are two main line items:

The energy consumed over the billing period based on the reading of the ‘import’ register on the meter; and

The energy exported over the billing period based on the reading of the ‘export’ register on the meter.

 

Why you can’t keep the old gross energy meter to give you generation data

 

The gross generation meter most likely belongs to and is registered to the distributor, and for as long as it is in use it is their responsibility to read it and maintain it. The customer could ask to buy it from the distributor, but at the very least they will need to come out and remove their nameplate and delete it from their system. A call to the distributor is helpful here to see what their policy is.

A gross meter is made redundant when most inverters have been fitted as the inverters have an ‘energy generated’ readout on them anyway. It is just not part of the register.

Can’t you leave the metering as it is, and just subtract the generation reading from the consumption reading ?

No, and the reason is that the energy sharing changes moment by moment, and is charged at different rates. So the net off is also at intervals.

 

The process that kicks off a change of meter

 

It starts with a call to your electricity retailer.

When you call a retailer to request a swap from gross to net metering will most likely be speaking to a sales representative and they will take this opportunity to renew and recontract their arrangements with the customer. If you are out of contract expect them to be really nice with a special offer.

It is very likely the offer will include an upgrade to a smart meter (known as a type 4 or interval meter). It is very likely the meter will have a value to be passed on of around $600.

The benefit of the new smart digital meters is you can be offered more and newer services, such as monthly billing and access to energy use and energy out (feed-in) data through a retailer’s web services (where they offer the service).

 

So you know your rights

 

It is the customer’s choice whether to continue to use accumulation metering or upgrade to a digital (smart) meter.

There is no obligation for the customer to move to a smart meter (type 4), as quarterly manually-read (known as a type 5 or type 6) meter reading and billing will support net metering and provide the same net-metering benefit. So long as you do not export energy (and expect a feed-in rate.)

If a customer is not contracted to a retailer, then the field is open. Shopping around for the best deal is useful, as some retailers may offer a free upgrade to a digital meter or a more attractive energy supply contract.

 

Some important questions to ask of yourself and the retailer

 

How much will the process to change from gross to net metering cost me ?

You should be aware there are a number of steps in the changeover that may or may not be included in the discussion with the retailer.

Firstly, the visit from the electrician to change the wiring will generally cost a standard callout fee plus hourly rate – it could be a couple of hundred dollars if the switchboard is not well set up.

Secondly, the actual meter change or reprogramming is likely to attract a charge of between $50 and $600. That work is likely to be carried out by an ASP, and the fees listed in the distributors’ pricing information on their websites.

If your retailer wants to be really nice they will be offering attractive pricing to customers who sign a new energy retail contract or elect to take on a smart meter, perhaps to the point where the change from gross to net is ‘free’. But beware of the ‘free lunch’!

 

So you know more

Can I change early without losing any money?

No. The power flows through the meters change as soon as the switchboard wiring is altered.

A list of accredited metering providers is on the AEMO website, at

http://www.aemo.com.au/Electricity/Retail-and-Metering/Metering-Services/Accredited-Metering-Providers-National-Electricity-Market-MP-cat-A-and-B-services

 

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