Settlement for solar energy. Changes in photovoltaics in 2022

The situation on the photovoltaic market in 2022 proves how the instability of the law changes the rules of the game in individual sectors of the economy in a very short time. From April 1, a revolution in the rules of accounting for energy surpluses took place on the photovoltaic market, which is widely echoed in the media and websites devoted to renewable energy. However, do the changes that have been affected by investments in photovoltaics frustrate its long-term profitability? Or maybe the commentators’ excessive emotions do not take into account the whole picture of the situation? So let’s follow the new regulations in force in 2022, primarily with the legal and financial aspects in mind.

Photovoltaics 2022 – changes for new prosumers

The widely discussed changes in photovoltaics came into force on April 1, 2022. Their goal is primarily the current system of settlements with the energy company. Let us remind you that so far the so-called net metering, i.e. a billing system based on the amount of energy delivered to the grid. The prosumer returned energy surpluses, which he could then collect at a convenient time (e.g. when the efficiency of photovoltaic panels decreased in the autumn and winter months). The previously produced surplus was collected with a decrease in the amount of energy by 20%. Photovoltaic 2022 means the transition to a completely different system of accounting for surpluses. Each person or company that will launch a new photovoltaic installation now will perform calculations based on net-billing, i.e. a sales model based on market prices. We will provide more details about the new billing system in the following paragraphs. Here, however, it is worth mentioning that it is the infamous net-billing that is responsible for the frenzy on the photovoltaic market and the massive commissioning of installations, just to make it before April 1. Are these changes really a government-staged blow to prosumers? Or maybe they have their justification?

New regulations for photovoltaics – why were they introduced?

The genesis of changes should be searched for a bit deeper than the comments of politicians who traditionally blame the EU institutions would suggest. The development of the photovoltaic panels market made the new trends more and more noticeable for the operators of energy networks. Are they not happy with the free energy provided by photovoltaic installations, from which they can keep as much as 20% for themselves?

It turns out that the bone of contention was the distribution fees paid to electricity distributors (they are professionally referred to as Distribution System Operators – DSOs). They play a key role in the entire energy distribution process. The DSO is assigned to a specific region, where it is responsible for supplying electricity from the seller to each collection point. Distribution fees are intended to cover the costs of maintaining the infrastructure. The problem remains hidden in the fact that prosumers had substantial discounts on distribution fees, with retailers and operators having to pay full rates. According to the sellers’ narrative, 20% of the retained energy was not enough to cover the losses generated by the growing number of prosumers who bear disproportionately low costs for distributing energy to the grid. In addition, there are also expenses related to the modernization of the entire energy infrastructure, which must be cared for by the increasing electricity transmission in both directions. Photovoltaics under the old rules was of course an attractive option for prosumers, but it ceased to be profitable for large energy companies.

What is the settlement for energy from photovoltaics in 2022?

Among the changes that have recently been experienced by photovoltaics, the current regulations create a billing system based on market prices of energy, and not the amount of energy fed into the grid. The new billing of energy from photovoltaics makes the prosumer a seller of electricity, who will convert the amount of energy produced according to the monthly average value according to the quotations on the Polish Power Stock Exchange. The funds (the so-called consumer deposit) will go to a dedicated settlement account, from where they can be used to purchase energy from the grid at another time. However, the consumption of electricity from the grid will be calculated against the annual energy tariff set by the regional supplier. Considering the fact that the settlement of photovoltaics will take place on an annual basis, there is a clear potential for significant changes in market prices, which, however, do not have to turn out to be clearly negative for prosumers. Fast inflation growth affects energy pricing even in the short term. The monthly index (which determines the price of electricity sold by a prosumer) will often remain higher than the annual electricity tariff. In this context, net-billing will not always turn out to be as disadvantageous as some media portray it.

Photovoltaics under the old rules – until when is the net metering system valid?

For those who were interested in photovoltaics, the new regulations raised a basic question: until when will the photovoltaics apply under the old rules? As mentioned above, the cut-off date was April 1, 2022. People who have managed to launch their installation before this date are guaranteed the possibility of continuing to use the old net metering system for the next 15 years. Concerns about the profitability of the new method of settlements meant that the beginning of the year brought a real boom for companies dealing with the assembly of panels, which did not work well with the execution of orders.

Changes in photovoltaics and reimbursement on investment

Even a double extension of the return on investment projected for net-billing is as true as fairy tales. For the field of renewable energy, which is photovoltaic, the change in regulations will not undermine the profitability of the investment. Adjusting the parameters of the installation to the actual energy demand in the household will keep the expenditure on individual components at a reasonable level. What’s more, new prosumers can still count on attractive subsidies from government programs, tax breaks or EU subsidies. In the light of the revolution that photovoltaics is currently undergoing, the changes in 2022 are less favorable for prosumers, but net-billing should not deter people interested in installing PV panels. This modern energy production system will still provide free electricity for domestic needs, and will also bring enormous savings for companies.