Net metering phase-out for 2025 canceled
In February the senate torpedoed new legislation regarding the slow phase-out of the net metering rules. That means that for the time being net metering is here to stay. What are the consequences for solar panel installations?Big news in the world of solar energy in the Netherlands: on February 13, 2024, the upper chamber of parliament voted against the proposed new energy law, which would have (among other things) regulated a slow phase-out of the net metering rules. According to the proposal, the current net metering would gradually disappear, starting in 2025. However, that proposal has now effectively been killed off and so the current system of net metering is set to continue for the foreseeable future.
What is net metering?
Net metering (in Dutch: salderen) means that electricity that you consume from the grid is compensated by the excess solar power that you feed into the grid. The electricity suppliers are obligated, by law, to deduct the amount of power you have fed into the grid from the amount that you haven taken out of the grid over the course of a year. On your annual electricity bill you will therefore only have to pay for the outstanding balance. For people with solar panels it’s a very profitable system: if you manage to produce, in one year, just as much as you consume, your electricity bill could end up being close to zero.

This was how it was supposed to go: a gradual phase-out starting in 2025...
The problem with this wonderful system is that it is unsustainable in the long term. One of the reasons for that is the tax that the government levies on electricity: people with solar panels pay a lot less tax on electricity because they only need to pay it on their outstanding balance. Now that about 1 in 3 homes in the Netherlands are equipped with solar panels, that means that the government is looking at a tax shortfall of close to 3 billion euros.
Surcharges and higher fixed costs
Another reason that the system inevitably has to change at some point is that the electricity grids are getting overloaded. Since the net metering system comes with no incentives for people to use the electricity they produce in their own homes, this means that every house with solar panels simply lets their excess power flow into the grid, all at the same time. The distribution grid operators are constantly clamoring for a change in the law, because their grids are getting congested, especially on sunny days around noon. Lots of power fed into the grid means that the voltage rises in the grid, and this can lead to inverters disconnecting. At the end of the day that’s also bad for owners of solar panels, because they’ll notice their systems switching off just at the very sunniest times of the day.
Finally the electricity suppliers (which in the Netherlands are independent from the grid operators) are also quite unhappy about the net metering status quo. Their customers with solar panels pay very little on their annual invoices and so the companies stand to lose more and more money. That’s why some energy suppliers have started to penalize customers with solar panels. If you have solar, then you have to pay a surcharge if you feed in more than a certain amount of electricity per year, or in some cases they make you pay more for your fixed costs.
Invest in solar: now is the time!
Sooner or later the net metering system as we have it in the Netherlands today will change, that’s a certainty. We don’t know when that will happen however: as we are still waiting for the formation of a new coalition government, things could take quite a while indeed. In any case, the fact that the existing proposal for a phase-out has been taken off the table means that solar will remain an extremely profitable investment for the near future. Anyone who installs solar today will recoup their investment in record time, and make money off the panels for many years to come: there has never been a better time to invest in solar! If you or people you know still don’t have any panels (or if you want to add to an existing system), now is the perfect time to get them. Let us know, we’ll be more than happy to help!
