- What is Solar Net Metering
- Solar Net Metering in Singapore
- How billing works for the SCT Scheme
- How billing works for the ECIS Scheme
- Should I consider buying electricity from retailers?
- Should I consider buying electricity at wholesale prices?
- Solar Net metering vs Solar battery
- How to make the most out of Solar Net Metering
- Conclusion
What is Solar Net Metering
Net metering is a billing mechanism that offers solar panel system owners credit for producing excess electricity and sending it back into the grid. In simpler terms, net metering allows homeowners to sell the excess electricity that they produce back into the grid.
Solar Net Metering in Singapore
For residential homeowners in Singapore, there are essentially 2 net metering schemes that are available.
The figure below offers a simplified way of deducing the type of scheme you are eligible for. The figure assumes that the capacity of your solar panel system is less than 1 MWac, which is usually the case for homeowners.
The net metering scheme that you are eligible for depends on the type of consumer that you are. There are 2 types of solar panel system consumers.
1. Non-contestable consumer (NCC)
- NCCs buy electricity from SP Services (SPS) at a regulated tariff.
- Eligible for Simplified Credit Treatment (SCT) Scheme
- You will be paid the rate of prevailing regulated tariff less grid charge for excess electricity produced (approximately 6 cents) .
- Formula: [X kWh * prevailing regulated tariff rate] – 6 cents
2. Contestable consumer (CC)
- CCs buy electricity from a retailer of their choice OR from the wholesale electricity market at the wholesale electricity price.
- Eligible for Enhanced Central Intermediary Scheme (ECIS)
- You can sell excess electricity to the market and get paid at the prevailing half-hourly wholesale energy price.
- Formula: X kWh * prevailing half-hourly wholesale energy price
- Useful conversion: 1 MWh = 1000 kWh
How billing works for the SCT Scheme
For homeowners who buy electricity from SP Services (SPS), you do not exactly get paid for the excess electricity that your system produces. Instead, any excess electricity that you produce is sent back to the grid and is used to offset your electricity bills for the month. If it exceeds your electricity bill, it will be used to offset your other utility bills (gas/water).
How billing works for the ECIS Scheme
Homeowners under the ECIS Scheme are paid via cheque at the end of every month by the SPS group.
Should I consider buying electricity from retailers?
The short answer is, it depends. Due to competition in the market, electricity retailers offer prices that are consistently on par or lower than SPS’s rates.
With reference to the table above, it is evident that the top few electricity retailers offer price plans that are cheaper than the rate offered by SP Services (SPS). Thus, it may be more cost-effective for homeowners to switch to the price plans offered by other retailers. However, it is important to consider of the contract’s duration. Most of the plans offered by the retailers have a duration of either 1 or 2 years.
This means that if you sign up with a plan offered by a retailer, you will be locking in on the price stated in the contract. While the fixed price offered by the plan may be cheaper than the rate offered by SPS at the moment, SPS’s price may be revised in the upcoming quarter and become cheaper. Nonetheless, it is worth highlighting that patrons of the plans offered by these retailers retailers can enjoy the certainty that the price they lock in will not change — a benefit not enjoyed by subscribers of SPS.
Electricity retailers in the market
Should I consider buying electricity at wholesale prices?
In most cases, the answer is no. As mentioned previously, those under the ECIS scheme are paid the prevailing half-hourly rate. This rate is determined by the demand and supply of electricity, which can lead to volatility in electricity prices. According to the Energy Market Authority (EMA), wholesale electricity prices have remained elevated and volatile in the recent months of 2023. This climate has led to a scenario where consumers who choose to buy electricity at wholesale prices might find themselves paying notably higher costs for their electricity, in contrast to individuals who have secured electricity through retail contracts with established electricity retailers or those who have chosen the regulated tariff facilitated by the SPS.
Solar Net metering vs Solar battery
A solar battery is a device that you can add to your solar power system to store the excess electricity generated by your solar panels at home. You can then use that stored energy to power your home at times when your solar panels don’t generate enough electricity, including nights, cloudy days, and during power outages. In Singapore, solar batteries are almost always the worse choice because of their high cost and low returns on investments, as well as likely a need for more frequent maintenance due to the lower maturity of storage technologies. This is especially so when there are already rebate schemes available for selling excess solar generated to the grid (instead of storing it for night-time usage). The exception may be homeowners who live in a strata landed home, or condominiums wherein sell back of excess solar is not possible.
How to make the most out of Solar Net Metering
1. Time-of-Use (TOU) Pricing Plans
Some retail companies offer time-of-use (TOU) pricing plans, where electricity costs change based on the time of day. By using electricity from the grid during cheaper off-peak hours for energy-intensive tasks and selling the excess electricity generated during the day, you can save money. At night, when solar panels are not producing power, you can benefit from lower grid electricity rates.
2. Smart Home Technologies
Integrating smart home technologies can optimize your energy consumption. Smart thermostats, for example, can regulate your heating and cooling systems more efficiently, reducing your reliance on grid power during peak hours.
3. Maintenance and Monitoring
Regular maintenance of your solar panels ensures that they are operating at their maximum efficiency. Additionally, monitoring your energy production and consumption allows you to identify patterns and adjust your energy usage accordingly.
Conclusion
In essence, net metering presents a valuable opportunity for homeowners to harness the benefits of solar energy while contributing to a more sustainable and cost-effective energy landscape. By generating excess electricity from solar panels and feeding it back into the grid, individuals can earn credits and lower their energy bills. The two main net metering schemes for residential homeowners in Singapore, Simplified Credit Treatment (SCT) and Enhanced Central Intermediary Scheme (ECIS), offer different compensation methods tailored to the type of consumer.
Navigating net metering efficiently involves considerations such as selecting the right scheme, aligning energy-intensive activities with off-peak hours and potentially exploring the advantages of time-of-use pricing plans. The integration of smart home technologies and vigilant system maintenance can further optimize energy consumption and maximize the financial benefits of net metering.
Ultimately, net metering not only promotes sustainable energy practices but also empowers homeowners to actively participate in shaping a greener and more resilient energy future. By making use of net metering, homeowners can make meaningful steps towards reducing their carbon footprint and enjoying long-term energy cost savings.
