What are the differences between installing a Solar Energy System under the NetMetering vs. the Feed-in-Tariff program?

A simpler registration process – compared with previous regulations which were for energy production, this regulation is for self-consumption. Previous Programs required attaining a production license with all it entails (proof of economic ability, comprehensive statutory examination, and compliance with stringent prerequisites), Netmetering is a self-consumption regulation which only requires a minimized construction permit and an appropriate size grid connection. This is the first program which does not involve government subsidy.

Determining system size – in the Netmetering program the maximum system size is determined based on electricity consumption, unlike previous programs where the IEC undertook to procure all electricity produced. The program includes mechanisms for the sale of the excess production to another consumer, but they are not financially advisable and are only good to minimize losses in cases where all of the electricity produced cannot be consumed.

The leasing model no longer exists – with previous programs the owner would lease a roof, and pay rent from the project’s revenues, generated from the sale of the electricity produced. This program does not have revenues from the sale of electricity and therefore the leasing model does not exist.

Project finance – with Netmetering program it is difficult to receive project-finance under the same terms as before, because there is no revenue flow. “Revenues” depend on consumption. In fact, there is no positive revenues flow, only a decrease of the negative flow of the electrical bill. For this reason the banks cannot mortgage the project’s revenues as security for system project-finance.
Connecting to the power grid – with Netmetering, as in a domestic or commercial system, the grid connection is made through the consumer’s main Electric Cabinet, while a medium system requires a new connection to the power grid. Connecting to an existing Electric Cabinet significantly reduces connection costs compared with a medium size system.

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