New Net Metering Rules in Egypt
On 28 April 2020, the Egyptian Electricity Utility and Consumer Protection regulatory Agency (“EgyptERA“) issued Decree no. 2 of 2020 (the “Decree”) setting out the new rules for net metering. This Decree is effective as of 20 May 2020 and it replaced previous decrees announced by EgyptERA in relation to net metering to the extent such decrees contradict with the provisions of the new Decree.
In order to be eligible to net meter, the solar plant has to meet the following requirements:
- The solar plant must be installed within the boundaries of the customer’s premisesThe plant can either be installed on rooftops or to be ground-mounted only within the boundaries of the facility or the premises. Solar plant installed on adjacent land to the customer’s premises cannot currently net meter.
- The capacity of a solar plant may not exceed the maximum load of the owner during preceding year
The capacity of a solar plant under the net metering system shall not exceed the maximum load of the customer during the fiscal year preceding the commercial operation date of such plant.
This requirement aims to avoid any abuse of the net metering system by certain users through installing solar plant which cover 100% of their electricity needs for the purpose of feeding huge surplus electricity to the transmission grid without buying any electricity from the distribution company. Such way of dealing overloads the network of the distribution companies without receiving any financial interest.
- The maximum capacity for plants owned by one customer should not exceed 25 MW in aggregate or 20 MW per project
The total capacity of all solar plants under the net metering scheme which are connected to the distribution grids and owned by one consumer shall not exceed 25 MW in aggregate, with maximum capacity of 20 MW per project.
An eligible customer for net metering should not be licensed to distribute electricity to the same project. This requirement aims to prevent the distribution companies from benefiting from the net metering scheme, since such system aims to encourage the use of solar energy by consumers not distribution companies. For instance, a distribution company which distributes electricity to a residential compound cannot install a solar plant to benefit from the net metering’s system.
Restrictions for Distribution Companies
The Decree provided that the total installed capacity for solar plants connected to the network of one distribution company under the net metering scheme cannot not exceed 1.5% from the maximum load of such company registered on the meter during the fiscal year preceding to the contract.
Restrictions for the National Grid
The aggregate capacity of installing solar plants under the net metering scheme across the country shall not exceed 300 MW. At the issuance date of the Decree, there were only 75 MW already licensed by EgyptERA. The remaining 225 MW which are available under the net metering system, are divided into the following:
a. 125 MW for capacity less or equal to 500 KW.
b. 100 MW for capacity more than 500 KW and up to 20 MW.
Billing for net metering
Payment for excess generated capacity shall be made on annual basis, after setting-off the consumer’s consumption at the end of June of each year. Payment shall be calculated according to the recent purchase price (piasters/KWh) contracted between the Egyptian Electricity Transmission Company (EETC) and a solar energy’s producer.
EgyptERA shall determine a balancing charge to be paid by the customer as a cost for combining renewable energy into the grid according to its voltage. Such charge shall be reviewed and amended by EgyptERA on regular basis.