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Currently, the vast majority of residential solar systems are connected to the electric grid by measuring household consumption and the production of solar panels on the roof on an alternative electricity meter. This clock differs from the traditional one in that it turns in the opposite direction, when the home does not currently use the electricity generated on the roof, but instead feeds it back to the large central network.
The solution is to read said electricity meter only once a year, and if the household consumed more than it produced, you will be billed for the difference, but if it produced more than it consumed, you can recover the value of the excess.
However, the latter is not a typical case, because the purpose of solar home systems is usually to offset consumption, that is, to restore the electricity bill in common language. Recovering the value of production surpluses is quite complicated on the one hand, and on the other hand, anyone who uses a state-subsidized loan for installation (and there are many) can install at most only solar energy equivalent to their annual consumption . In other words, it cannot produce more than it consumes with state aid.
This solution has a key advantage for the consumer: it does not matter how much the price of electricity will be in the next 20 to 30 years, because if you produce as much as you consume, your electricity meter will show zero every year, which means that you will not have to pay. the electricity bill.
However, the settlement of the balance will end at the end of 2023 and will be replaced by the gross settlement.
ITM says that in the new system, “the price of the energy extracted from the grid will be billed according to the supply contract, so it can be the same as the unit price of universal service for residential customers. The purchase price of the energy supplied to the grid by the solar producer will also be determined at a later stage. “
This means that from now on it will not be fixed on an annual balance, but on production and consumption separately. Consumption is calculated at the current price of electricity, but we do not (yet) know at what price production will be assumed.
The point is that if, from a household point of view, consumption and production are no longer accounted for at the same rate, the difference must be paid.
For example, if we calculate a gross price of electricity of 35 HUF, the utility company will bill the household according to the gross settlement system, but if, for example, it “buys” the kWh of electricity it produces for only 30 HUF and produces the same amount annually. you consume, then the annual electricity rate will no longer be zero, but 5 HUF. That is, from 2024, even if someone installs the same solar system in their house as now, in this case they can no longer reset their electricity bill.
It is also immediately apparent that if such a price difference enters the settlement, one of the main benefits mentioned above will immediately cease to exist: independence from future electricity prices. If the consumer price of electricity will be higher in, say, 10 years than now, and the purchase price will not increase proportionally, the overall costs of the home will increase with the same number of solar cells.
This leads to a perhaps even more important conclusion. In fact, if a home views its solar system as an investment, it is essentially impossible to calculate the return. This is important, as the most common lay question about solar panels for years has been, “When will I get paid?” – that is, when will the current investment be compensated with the savings from the reduction of the electricity bill.
If, on the other hand, the ministry introduces a variable into the equation, the value of which can be adjusted at any time by the agency, and does not indicate in advance in what respects it is expected to change, it actually renders the future unaccountable.
Let’s look at an example of this with more specific numbers. Suppose the monthly electricity bill for a (larger) family home is HUF 20,000 today, and the family pays it at a fixed rate. If you want to restore this overhead element, you will have to invest around 2.5 million guilders in a solar system and enter into a contract for the settlement of the balance. If you buy and install solar panels, you will get a return on your investment in 125 months (that is, 10 years and 5 months) and from then until it ends with the end of its solar life cycle (in some cases 25-30 years) you will never have to pay anything, no matter how much. the consumer price of electricity in the future.
However, since MFB currently offers an interest-free loan with a maturity of up to 20 years for such an investment with a deductible of 10%, it is easy to calculate that a zero electricity bill can be resolved immediately with a deductible of 250,000 HUF and a loan of 2.25 million. In this case, the general household expenses will be immediately reduced by HUF 20,000 and the monthly repayment of the HUF 2.25 million loan will be HUF 9,375 over 240 months.
In other words, the family is making a net overhead reduction of HUF 10,000,625 per month compared to its current financial situation (after a one-time cost of HUF 250,000), and after 20 years, not only will the loan repayment fee, but also the electricity bill until the end of the solar operation.
This is all just a rough estimate, but it’s a good indication of how simple long-term financial planning is at the basic level today thanks to balance. However, this will not be the case from 2024.
Continuing with our example: if the family buys solar panels for HUF 2.5 million, but there is no balance settlement, profitability will be fundamentally affected by the difference between the consumer and the purchase price. However, today we do not know the magnitude of this, we cannot even estimate it, so we cannot even calculate the recovery time.
More importantly, however, the long-term variability of this difference is ultimately an inability to estimate. Let’s go back 20 years: in 2000, could someone have estimated the price of electricity today and what policy goals will apply to the production of domestic solar energy in energy agencies? Why could you estimate the same for the next 20-30 years now?
Also, in the case of loans, the same dilemma arises, just because of the loan the calculation will become even more complicated.
However, it is clear that if the gap between the current consumer and the purchase price becomes large in the coming decades, it could greatly delay the payback period for solar panels. What is really dissuasive, however, is not this in the new system, but the fact that it will be necessary to anticipate for 20 years how this gap will change, because if, for example, the gap gradually increases, families will have to face the problem of Solar energy. its recovery period is as long as strudel dough.
As the years go by, the payback is not approaching, or is hardly approaching, as if your watch is ticking by another timeline. This is already a prospect that could make potential investors think.
It would not be surprising, given the above, if by the end of 2023, solar-minded homes would have rushed to installers. The bad news for them, however, is that the number of super prime interest-free loans in the metropolitan region has dried up and is also declining in rural areas.
ITM says it will move to a grant system after the loan expires, but is still working on the details.
Balance settlement, of course, can also be interpreted as a home user using the electricity grid as a battery: when you cannot immediately use the electricity generated on the roof of your house, you load it into the utility network and recover it when it needs electricity, but it doesn’t shine. Sun. A small residential power plant, by definition, typically loads a lot into the large common system in the summer and draws most of the power in the winter.
Therefore, the liquidation of the balance also means providing the public with a huge and endless battery in the form of a utility network, essentially free of charge.
From this point of view, the question may rightly arise whether this convenient solution is justified free of charge, but at the same time the answer must be given in a predictable and predictable way, for example, by setting and keeping low the difference between the consumer and the purchase price.
Of course, there are also important aspects of grid maintenance behind the billing problem. In our current article, we approach the issue only from the perspective of the residential user, but in our next article, we will also move on to the side of utilities and system management.
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