From May, new users can only connect to the electricity microgeneration net payment system

In accordance with the amendments to the Law on the Electricity Market, a net settlement system will start operating in May, which provides for mutual settlements between households with solar panels in monetary terms.

Changes in the law provide for a very significant change in the principles by which electricity-producing households transfer it to the common network, that is, until now a net accounting system was used, when the amount of electricity transferred by a household to the common network was counted, which could then be received back, while in the future, a net accounting system will be used a settlement system that will list the price of electricity transferred to the common network at a specific moment, but in the event of a power shortage, the household will have to buy it already at the price of that moment. Certain industry experts have predicted that these changes will significantly reduce the appeal of solar panels to consumers.

In February of this year, the government approved amendments to the rules for the sale and use of electricity, which provide that starting May 1 this year, a new system will start operating in Latvia for households that produce electricity for self-consumption from renewable resources, for example, by installing solar panels and handing over the surplus to the electricity dealer.

The Minister of Climate and Energy Kaspars Melnis (ZZS) previously stated that there are around 18,000 households in Latvia that have installed solar panels, and they supply themselves with self-produced electricity for a large part of their annual consumption. The goal of both the historically existing system – net accounting, and the new system is to use the produced electricity for own consumption.

Households that have installed solar panels and currently use the existing system – the net accounting system – will be able to use it until February 28, 2029. It was possible to join the existing net accounting system until April 30 of this year.

At any moment, starting today, May 1, residents will be able to freely switch from the net accounting system to the net payment system.

The Ministry of Climate and Energy (KEM) states that the net payment system is used by active users who have installed, for example, solar panels and produce “green” electricity. Surplus electricity, which will be produced and not immediately used for own consumption, will be able to be transferred to your trader at the price agreed in the contract, including the price of the so-called universal service.

KEM emphasizes the majority of the benefits of the new system, including that companies will be able to use the net payment system in the future, the generated electricity will be able to be used in all user facilities, as well as the capacity of renewed production equipment, such as solar panels, will be able to be increased up to 999,999 kilowatts (kW) from the previous 11.1 instead of kW.

It will also be possible to transfer excess electricity to your dealer at the price agreed in the contract, including the price of the so-called universal service, if the power of the equipment is up to 50 kW. At the same time, savings in the “virtual wallet” can be used to cover electricity bills, both electricity prices and system services.

The universal service can be used by households with installed capacity of production equipment not exceeding 50 kW. The minimum price for the transferred energy shall not be lower than zero euro per megawatt hour (MWh), and the trader shall not be able to reduce it by more than 20 euro per MWh from the next day’s hourly price of the “Nord Pool” exchange.

For example, if the hourly price of the “Nord Pool” exchange for the next day is 80 euros per MWh at that moment, the final price for which electricity will be transferred to the trader is no less than 60 euros per MWh.

Users whose installed power generation equipment exceeds 50 kW will have the opportunity to agree with the trader on another type of electricity net billing system contract, including agreeing on the price at which the user will transfer excess electricity to his trader.

In order for the active user to be able to consume electricity in all of his facilities, the contract for the sale of electricity as well as the net settlement system for all facilities of the active user must be concluded with one merchant, and the contract must be in the name of the active user. All objects of the active user must also be connected to networks managed by one distribution system operator, according to KEM.

The goal of both the historical net accounting system and the new net settlement system is to enable users with microgeneration equipment to produce electricity for their needs as simply as possible – with less administrative burden, says Melnis.

The new system was created to expand the circle of users who can use such a system, while ensuring that the expansion of the system does not cause negative consequences for other electricity users, emphasizes the minister.