Export meter retro-fitting
The return on investment income from PV systems comes from 3 key areas:
- The government subsidy, usually the Feed-in Tariff
- Savings that are made from not purchasing grid electricity; and
- The sale of exported electricity that goes back to the grid
Experience has shown that in many cases the phrase “Feed-in Tariff” creates confusion about what the subsidy being paid is for, since it gives the impression that electricity that is being generated is being “fed-in” to the grid and a payment is being made for it.
In fact the Feed-in Tariff is paid regardless of whether the electricity generated is used on site or fed into the grid. The FIT payment is made because the electricity has been generated by a decentralised renewable technology. If the electricity is exported as well, then a separate amount is due, subject to accurate export metering being in place.
Weekend electricity demand
Especially when they were first becoming popular, solar PV systems were often sold in the UK on the basis that 100% of the electricity that they generate would be used on site. This assumption was made because the total accumulated demand at a site over one year was higher than the total amount of electricity that would be generated by the solar. The issue with this method is that it is very common for the vast majority of the total demand to be required on weekdays only, with weekend demand being far lower.
Since there are approximately 104 weekend days in a year out of a total of 365, 28% of the total solar generating time will be at weekends. Adding in holidays and other work pattern factors, it is quite common to see total on site consumption of solar electricity well below 70%, even when total demand is very high.
If the electricity is then exported to the grid, then this can be metered and it is possible to negotiate further payment for it. The rate that is paid for supplying grid electricity by exporting is always going to be lower than the price that it is sold to consumers for, so essentially you are selling at a wholesale price.
Currently, it is possible to sell excess electricity at a rate of £0.049 per unit (kilowatt-hour). Provided there is sufficient electricity being exported it is generally worth installing an export meter, which will then pay for itself and generate income in future.
Missed export income
The table below shows the available extra income for a typical 50kW system generating 45,000kWh per annum.
Cash flow projection
The second table shows the cash flows associated with installing the meter and paying the administration fees, under four different scenarios. In each case the installation will pay for itself, with a faster payback period and larger total income where the export percentage is higher. This income is in addition to FIT payments and the savings achieved on electricity purchases, and can improve the overall return on investment of a PV system.
NWT’s operation and maintenance experience shows that it is not at all uncommon for a 50kW system, particularly one installed from 2010-2014, to be exporting electricity to the grid without metering the export or receiving payments for it. Somewhat surprisingly, it is not even uncommon to find large solar PV generators exporting more than half of the electricity that they produce without the owner receiving the income due because there is no export meter in place.