Solar panel feed-in compensation: a guide for businesses
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The feed-in payment, in Dutch terugleververgoeding, is the price your energy supplier pays for solar power you feed back into the grid that is not netted off. At present it applies only to the part you feed back beyond what you consume. Once the Dutch netting scheme ends, the feed-in payment will apply to all the power you feed back.
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Solar panel feed-in compensation: scattered information versus Energy Intelligence
Anyone with solar panels rarely uses all the power themselves. Surplus power goes to the grid, often on a sunny afternoon when consumption is low. As long as the Dutch netting scheme applies, your supplier offsets that feed-in against your consumption. But what happens to power you cannot net off, and later to everything you feed back? That is where the feed-in payment comes in: the price your supplier pays you. For every panel owner, that payment helps determine what generation still earns.
- The feed-in payment currently applies only to the surplus: the power you feed back over a year in excess of what you consume, which cannot be netted off.
- Suppliers set their own payment level and often also charge feed-in costs; those costs can sometimes exceed the payment itself.
- Once the Dutch netting scheme ends, the feed-in payment becomes the main mechanism for all the power you feed back.
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What is a feed-in payment?
The feed-in payment is the amount per kilowatt-hour your energy supplier pays you for solar power you feed back that is not netted off. Netting works like this: your supplier first subtracts your fed-in power from your consumption, so you pay only for what remains. If over a year you feed back more than you consume, that surplus cannot be offset. For that part your supplier pays a reasonable feed-in payment. This payment is usually lower than the rate you pay to draw power from the grid. If you find the payment too low, you can switch to another supplier.
- It is the price your supplier pays for fed-in power that is not netted off.
- For now it applies only to the surplus above your own annual consumption.
- The payment is usually lower than the rate at which you draw power.
- Your supplier must offer a reasonable payment; otherwise you can switch.
Why does the payment differ per supplier?
There is no fixed nationwide rate for feed-in. Each supplier sets its own feed-in payment level and the way it is calculated. Many suppliers also charge feed-in costs. These cover the extra costs that solar customers cause, such as imbalance costs and higher purchasing costs, because solar power is often fed back when the market price is low. The Dutch regulator ACM has ruled that charging feed-in costs is not in itself unreasonable, but also noted that suppliers calculate them differently, which makes contracts hard to compare. Note that the feed-in costs can sometimes be higher than the payment you receive for feeding back.
- There is no legally fixed rate; each supplier sets its own payment.
- Alongside the payment, many suppliers charge feed-in costs.
- The ACM finds feed-in costs not unreasonable in themselves, but contracts are hard to compare.
- Feed-in costs can sometimes exceed the feed-in payment itself.
What does this mean for the value of solar panels?
As long as netting applies, fed-in power is worth as much as power you draw, except for the surplus above your consumption. Once the netting scheme ends, that changes: the feed-in payment then applies to all your fed-in power, and it is lower than what you pay to draw power. Power you use yourself at the moment your panels generate keeps the most value, because you pay no supply rate and no tax on it. Matching your own consumption to generation therefore starts to pay off more, for example by running appliances during the day. Storage in a home battery can also become more attractive, because you then use generated power yourself at a later moment instead of feeding it back cheaply.
- Under netting, feed-in is worth almost as much as consumption, except the surplus.
- Without netting, the lower feed-in payment applies to all your feed-in.
- Power you use directly yourself keeps the most value.
- More self-consumption or storage in a battery therefore pays off more.
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