The Department of Energy (DOE) has laid down a policy allowing “one-year banking” of credits that an end-user may claim under the net metering program in the renewable energy (RE) sector.

Under the proposed ‘banking of net metering credits’ as institutionalized under DOE Circular No. 2020-10-0022, it was stipulated that “all net metering credits shall be banked for a maximum of one calendar year,” and that shall serve as the period when such credits shall be claimed or availed of by the end-user for cost offsetting --as reckoned from the volume of power exported to the grid.

Net metering participants are generally referred to as “prosumers” because they produce their own electricity needs and any extra from their generation can be injected to the grid. It is also that surplus generation that can be banked as net metering credit.

That extra generation will then be assigned a value or cost that will become the subject of offsetting for the charges that the prosumer will be claiming from its distribution utility-host, primarily in cases that it will be needing to draw electricity directly from the grid.

Most “prosumers’ or net metering participants in the country to-date are using solar technology in producing their own electricity requirements – either in their homes or in their buildings.

As defined, a net metering credit refers to “an amount of energy exported into the distribution system by a qualified end-user in excess, subject to the prescribed valuation of the exported energy.”

In its Circular, the DOE likewise stated that “as to the net metering credits generated prior to the effectivity (of the Circular), the ERC (Energy Regulatory Commission) in consultation with the distribution utilities (DUs), shall issue the necessary rules on the disbursements of all outstanding peso credits to their respective qualified end-users within 90 days from the effectivity of the Circular.”

The ERC shall also determine and approve all costs that must be incurred by a host-DU relative to the net metering program, such as those on metering, supply and storage; which will then be correspondingly charged to the end-user.

Further, it was emphasized that “any qualified end-user under the net metering arrangement, under normal circumstances, shall not be a net generator or producer at the end of each calendar year.”

As explained, that policy prescription is intended “to avoid oversizing the net metering facility, where the actual electricity generation of the facility has exceeded the qualified end-user’s annual energy consumption.”

To guarantee the viability of the policy, it was also mandated that the DOE and ERC “shall review and evaluate the implementation of the enhanced net metering program every two years or as the need arises.”