Changes in the net metering law postponed until 2025

On the 20th of May 2022 the new cabinet minister for Economic Affairs and Climate sent a letter to parliament outlining his plans with regards to the development of solar energy in the Netherlands. The letter details the government’s intention to change the existing proposals concerning the gradual phase out of the net metering system for households. Instead of starting in 2023 to decrease the percentage of feed-in electricity that we can subtract from our electricity consumption, the new starting date for this process has been moved to 2025. 

A reminder: how does the current system work?

The current net metering law (in dutch: salderingregeling) stipulates that every kWh of electricity that a household feeds back into the grid is worth just as much money as what you need to pay for a kWh consumed from the grid. On your annual electricity bill the amount of power fed back into the grid is subtracted from the amount of power you have consumed in that year, and you will only be billed for the resulting balance. (N.B.: if you feed more power back into the grid than you consume over the course of the year, then you will receive a lower compensation for that ‘extra’ bit of electricity. The exact amount varies from one energy supplier to the next). Nowadays more and more households are becoming energy producers with their own solar panels, which means the state is losing money on tax revenue, and the low voltage grid is becoming increasingly strained at certain times of the day. That’s why the current net metering system will inevitably have to disappear sooner or later. From then on the amount of money people receive for feed-in power will be considerably lower than what they pay for consumed power.

The previous Dutch government had already set up a plan for the gradual dismantling of the net metering law. In this original plan the amount of feed-in power that was subjected to net metering would decrease every year by 9%, until it was completely abolished by 2031. However, the previous government was forced to resign in 2021, before the plans had been adopted into law. The caretaker government that stayed on until after the elections did not have the power to push any new legislation through. That’s why we had to wait for a new government in order to get things moving again.

What has the new government decided to do?

The net metering law will remain in place in its current form until January 1st 2025. From that day on the percentage of feed-in energy that is subject to net metering will gradually decrease, just like in the original plan. However, the first step will be relatively large, so that the goal of zero net metering in 2031 can still be met. The new percentages are indicated in the graph below.

Net metering will remain at 100% until 2025, at which time there will be a significant drop followed by a gradual phase-out

Starting in 2025 we won’t be able to subtract the full amount of feed-in power from our consumption anymore: the percentage for that year will be 64%. That means that we can subtract 64% of the amount of electricity that we fed back into the grid from the power that we bought from the grid.

The rest of the feed-in power, i.e. the remaining (100% - 64% = ) 36%, is still worth some money, although it is a lot less than before. For these 36% we will receive a lower compensation from the energy supplier. The government plans mention a so-called ‘reasonable compensation’ as a minimum tariff, which would be about 80% of the basic price of electricity without taxes or surcharges, which probably means just a few cents per kWh. There may be some energy suppliers willing to offer a little bit more than the bare minimum, in order to attract customers, but it most likely won’t be a lot.

What does postponing the end of the net metering system mean for you?

The fact that the gradual disappearance of the net metering law has been postponed by two years means firstly that you will benefit even more from your solar panels than expected. And if you still don’t have a solar installation on your roof today, then now is the moment to invest in your own solar panels in order to still get maximum profit out of the system in the coming years.

Another consequence of the delay is that we still can’t recommend to our customers to purchase battery storage for now. With net metering still in pace, there is no economic benefit to having a battery storage system installed. (Of course some customers have other reasons than just financial ones to install batteries, such as wanting to have power even when the grid is down). We hope the prices of batteries will start to come down in the next few years, so that by 2025 adding batteries to your system will become a more worthwhile investment.

How certain is it that the new plans will become law?

On February 7th 2023 the lower house of parliament (or: Tweede Kamer) finally voted to approve the new law. However, the law now still has to be approved by the senate (or: Eerste Kamer). It's not 100% certain that the senate will approve the new law, because the ditribution of seats among the political parties is different in the senate than it is in the lower house. Also, there's an election coming up on March 15th 2023 which will impact the seats in the senate. For now it's unclear whether there will be a vote on the new law before or after these elections. So nothing is certain just yet! Until the law is finalized, everything is still open to change: after all that’s what happened with the previous plans. However we do believe the new plans represent the most likely future path for the economic value of solar systems in the Netherlands.

If any new developments do occur, we will of course try to keep you informed as soon as possible. In the meantime you can continue to draw maximum profit from your solar panels. Also, please convince your friends and family who might have been hesitant about solar panels that the best time to invest in solar is right now! And if you use the ‘Mijn Zonnefabriek’ app to sign them up, you can even earn €100 for each new customer!