If it is up to the House of Representatives, the net metering scheme for solar panels will be phased out in the coming years. A majority approved the plan on Tuesday. But at the moment the proposal cannot count on enough support in the Senate. Five questions about the scheme and why it is still uncertain whether it will actually happen.
How does the current net metering scheme work?
People with solar panels on their roof can completely offset the energy they generate themselves against their consumption. That’s called salting. Those who use 3,000 kilowatt hours annually and generate 2,500 kilowatt hours themselves, therefore only pay for 500 kilowatt hours of electricity.
No tax has to be paid on the remaining 2,500 kilowatt hours. Even if you don’t use that power directly from your own panels, but get it from the electricity grid when the sun isn’t shining.
Why does the government want to phase out the scheme?
Due to the growing popularity of the net metering scheme, the government is losing more and more tax revenue. Solar panels have also become cheaper and cheaper. You can earn back the investment faster and faster.
The cabinet also finds the net metering scheme to be increasingly unfair for people without solar panels. This is because the energy suppliers incur higher costs as a result of the scheme. They pass this on to all their customers. According to regulator ACM, households without solar panels also pay a few tens more per month.
What should that process look like in the coming years?
The government does not want to end the net metering scheme at once, but to phase it out in steps. In 2025, people with solar panels may still net 64 percent of the electricity they generate. This will then become less and less, until in 2031 it will no longer be possible to offset at all.
What should replace salting?
If the scheme is indeed phased out, something will take its place. From 2025, there must be a feed-in fee for all power that you supply back to the grid. This is at least 80 percent of the ‘basic’ electricity rate that you normally pay.
But the tax benefit will disappear: you will pay energy tax on all the electricity you consume from the electricity grid. Only the electricity that you use directly from your own solar panels remains free and tax-free. That is why it will pay more to turn on the washing machine and dishwasher when the sun is shining, for example. Or to store your own solar power in a home battery.
There was also talk of a maximum for the compensation that people would receive as standard for supplying electricity back. This will no longer take place, because the House of Representatives has amended the cabinet’s plan on a few points. However, there must be an option for this in the law. In extreme cases, such as extremely high energy prices, the cabinet can still set a maximum.
The cabinet also wants to guarantee that people will continue to earn back their investment in solar panels within seven to nine years. Even if the net metering scheme is phased out. There will be two evaluation moments to see whether the phasing-out path is still correct.
Why is it not yet certain that this will happen?
If the government wants to phase out the net metering scheme, the law must be amended. This can only be done with the support of parliament. The House of Representatives approved it on Tuesday – as expected. The coalition parties (VVD, D66, CDA and ChristenUnie), SGP, Volt, FVD, Fractie Den Haan and one-pitter Gündogan voted in favour.
But these parties do not have a majority in the Senate. As a result, it is still uncertain whether the net metering scheme will be phased out. The cabinet was actually counting on the support of GroenLinks and PvdA, but it had already appeared that the two left-wing parties did not want to agree to the plan just like that.
They first want to see that the cabinet is doing enough for people in (social) rental housing. One in three owner-occupied homes now generates solar energy, while sustainability in the rental sector has lagged behind. There, only one in six homes has solar panels on the roof.
Climate minister Rob Jetten was not yet able to convince the parties in the House of Representatives of his plan. He will, however, be talking to housing associations in the near future. He may be able to convince the factions in the Senate in a while.