Homeowners with solar panels will receive less money from 2025 for the electricity they feed back into the grid. Due to the lower price of solar panels and overloading of the electricity grid, the years-delayed phasing out of the ‘offsetting scheme’ has become inevitable.
At the moment, people with solar panels can still offset all the energy they feed back into the electricity grid against the energy they get from the grid. Anyone who annually supplies 2,000 kilowatt hours (kWh) and consumes 2,500 kWh only pays for 500 kWh. On the remaining part, not only the delivery rate, but also the energy taxes are waived.
It is precisely this so-called ‘offsetting scheme’ that has made it very attractive for years to take solar panels. Partly because of this, they are now on more than one and a half million houses. Small-scale solar roofs supply about 4 percent of all electricity we use in the Netherlands.
Tax credit for the rich
But because of that popularity, the state treasury is missing out on a lot of money. Next year, this subsidy on solar panels is estimated to cost the government more than 400 million euros in lost energy taxes. And that is increasing every year.
The tax credit goes to households with a relatively large amount of money. “That’s a bit the other way around,” says energy expert Thijs ten Brinck of WattisDuurzaam.nl. “Especially if you have your own house with space for solar panels, you also get a discount on energy.”
Moreover, solar panels have become so much cheaper in recent years that government subsidies are no longer necessary. Even without a netting scheme, they will pay for themselves well within the lifespan of 25 years. And with today’s high energy prices, even earlier.
Electricity grid is not a battery
Meanwhile, the electricity grid suffers from the popularity of solar panels. In older residential areas in particular, the grid is not made for houses that ‘send back’ many kilowatts of electricity on sunny days. Panels sometimes already fail because the grid cannot handle the generation.
That does not mean that we have to install fewer solar panels, but that we have to use the generated energy in a smarter way. Solar roof owners can now use the electricity grid as “a kind of fictitious battery,” says Ten Brinck. Anyone who generates more energy than it consumes simply sends it to the grid. If the sun doesn’t shine, you take power from it again.
This leads to headaches for grid operators, who will be investing many billions in the coming years to upgrade the electricity grid. She want prefer that households use the self-generated electricity as much as possible within their own home, so that the grid is relieved.
The abolition of the netting arrangement gives consumers a price incentive to do so. The electricity you use from your own roof remains free, while you will pay tax on the rest. This also makes the use of a (still very expensive) home battery financially more interesting.
Phasing out netting scheme
- The netting arrangement will not disappear in one go. The subsidy will be phased out in stages from 2025.
- In 2025 and 2026, households will still be able to net 64 percent of the electricity supplied. This will steadily decrease to 28 percent in 2030. From 2031, netting will no longer be possible at all.
- The House of Representatives still has to approve the proposed phasing out of the scheme.
Consumer gets ‘reasonable compensation’
In the future, you must continue to receive ‘reasonable compensation’ for the power that you supply back to the grid and that you can no longer balance. Minister Rob Jetten (Climate and Energy) wants to ensure that owners of solar panels receive at least 80 percent of the supply rate that they pay to their energy supplier themselves. wrote he recently presented to the House of Representatives. Even if you do not use the electricity from your own solar panels, they will continue to generate (less) money.
Originally, the netting scheme was supposed to be phased out from 2020, but that was postponed and due to the long cabinet formation, the intended start date in 2023 will not be met either. Ten Brinck hopes that it will be possible to phase out the subsidy from 2025. “The right time was actually a few years ago.”