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How net-metering can bring down your electricity bill

May 2, 2019
How net-metering can bring down your electricity bill

We pay our monthly bills to power distribution companies, but have you ever wondered how the companies can pay you?

All you have to do is install an alternative source of electricity generation, such as solar or wind power. The excess electricity created by this system can then be added to the national grid.

The method is called net metering.

It requires the installation of bi-directional meter. The exported electricity goes from the consumer to the national grid while the imported is what the consumer receives from their power utility.

Without net metering, the excess electricity generated is unaccounted for and brings no benefit to the consumer.

How to get a net-metering connection

Any residential, commercial, industrial or agricultural consumer with a three phase connection at 400V – 11 kV is eligible to apply for a net metering connection.

After applying, the process takes a maximum of 72 days for completion. The consumer has to obtain a load regularisation facility from their respective IBC if their sanctioned load is less than the connected load.

In Karachi, K-Electric installs a bidirectional meter. The meter records the excess electricity generated and the consumer is given a credit bill at the end of the month. Each unit exported to the grid is balanced off against the units imported by the consumer.

The refund process is completed in approximately 20 working days. Later, the consumer or the vendor is told to collect a cheque, which is issued with the consumer named as the beneficiary.

If you have a bidirectional meter installed at your place, you will continue receiving an electricity bill as before. If you have consumed 500 units from the grid and your system generates as many units, you will receive a bill of zero rupees. If you consume 300 units and your system generates 500 units, your excess 200 units will be added to the national grid. Conversely, if your system generates 300 units and you consume 500 units, you will be billed for 200 units.

There are as many as 45 vendors registered with the National Electric Power Regulatory Authority. They are authorised to install solar or wind power generating systems in the country. You may ask any of these companies to install a solar or wind power system at your residence. After installation, you can apply for net-metering connection through the same company.

The company will then inspect the installation at your residence. Once satisfied with the security and standard of the apparatus used in the system, the team will forward your form with its recommendations. The concerned utility will then install a bidirectional meter at your residence.

After getting a license from NEPRA, you become an authorised distributor of electricity.

When was this system introduced and why?

NEPRA made this system in 2015 to cope with the power crisis in the country. However, the system had some complexities. NEPRA then devised a complete framework for the system in 2018.

“Net-metering is a new concept. It is a landmark achievement in the energy sector,” former premier Shahid Khaqan Abbasi had said. “This will help meet the country’s power demands and bridge the line losses,” he had said.

After January, 2018, only the vendors approved by the Alternative Energy Development Board were allowed to install a net-metering system. The list of AEDB’s pre-qualified vendors is available online.

The vendor designs the system in accordance with the requirements of both KE and the consumer.

KE is not part of the pre-qualification process. KE only allows vendors who are qualified by AEDB and have an office in Karachi.

Does it help?

There are at least 400 consumers using the net metering system across the country. As many as 150 consumers are using the system in Karachi.

NEPRA says it is receiving applications for installation of the net-metering connection in large numbers. It issues five to 10 licenses on a daily basis.

The consumers in Karachi seem to be satisfied with the net-metering connection. The bill reduces by 70% to 80%, they say.

This means if a consumer was billed Rs100,000 for a month before getting the connection, the bill now stands reduced to Rs20,000 to Rs30,000 a month. Some consumers don’t have to pay anything.

If a consumer receives a bill with a negative amount, it means the power utility will pay it. A credit bill adjusted with the next month’s bill, according to NEPRA’s policy. If there is a negative balance for three consecutive months, the consumer can opt for reimbursement. The consumer can initiate the refund process through the vendor with an application. They may also directly mail at bill@ke.com.pk. The utility is bound to refund you within 20 days.

A consumer, Tahira Raza, supported the net-metering system. “Retired people have to use their budget with extreme care,” she said. “If they can save thousands of rupees in power bills, it is nothing short of a blessing.”

How much does it cost?

A system with a capacity of 1KV costs Rs70,000, according to NEPRA. However, the companies certified by the regulatory authority receive Rs80,000 to Rs100,000 to install a system with a similar capacity.

The cost depends upon the quality of the product, an engineer Danish Shakeel told SAMAA Digital. “If we install the 1KV system with the German products, it will cost Rs100,000 and Rs85,000 with the Chinese products,” said Shakeel.

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