Solar energy is great

Until the government decides that it wants a piece of the cake.

 Economy   June 8, 2023

How the things are working here in the Netherlands is that you spend some money installing your fancy solar panels (a couple of thousands euros), start praying for the sun to shine (1 out of every 3 days) and save
tons of cash on your electricity bills while your pride is growing that you're saving the planet and fight the climate change in the same time. Or so it goes.

Well... things might not be exactly like this.


First of all, the installed solar panels systems (or probably most of them), are working in a semi-independent manner. You generate electricity and you push it into the network, and then your consumption is coming directly from the same network. The electricity company will make a bill only for the difference, if that's the case. If you produce more that you consume, then you're going to get some money back (lucky you, isn't it?!). That means you're not completely independent from the main network, but more like a subcontractor.

How much back?

According to this article

Vattenfall is top of the list of good payers, crediting customers with a variable energy contract of 16.8 cents per kWh. However, the Swedish state-owned company is bottom of the list with a credit of just 4.5 cents for customers with a three year fixed agreement.

What is important to notice, is that a kWh produced by you in the summer is not the equivalent of a kWh consumed by you in the winter (or the cold seasons). Also, the amount of generated electricity is higher in the summer, but most of the households consumption is in the winter (due also to the forced push to the electric based heating systems).


That means that you might end up producing 4-5 kWh in the summer (and getting paid for them), while in the winter these are the equivalent of maybe 1 kWh, that you'll have to pay (since as obviously stated, the price you get is way smaller than the price that you pay per unit).


But that also means that the energy companies might just refuse to take your kWh or not pay for your freshly produced green energy:

“On sunny days there is a surplus of electricity and that has led to falling or even negative prices,” Kuipers said. “This means that energy companies are actually paying for the electricity they are being delivered even though there is a surplus.”

There is also the sensitive topic of the (lost) taxes.

The government plans to change the rules on feeding electricity back into the grid, because the current system is costing the treasury more than €400 million in lost energy taxes.

If you consume one kWh from the network, you pay some taxes on it. But if you produce, then this kWh will be deducted from your consumption and no taxes will exchange hands. And we all know how hungry a government can become over time. Something that they cannot control, it cannot be allowed to exist.

The Consumentenbond also wants guarantees that households can earn back their investment in seven years.

This is just wishful thinking and probably a lot of people didn't even considered the return on investment for these panels.

There are some solutions to all these, but also disadvantages:

- use of batteries to store the produced energy - this works nice, but batteries are costly and require space that most houses don't have. Also they degrade over time, so the yearly amortization should be taken into account versus the utility of them for the household.


- install a switch that will allow you to consume directly from your own panels farm; when that's not enough, switch to the main network. This will give you independence over how you decide to spend your kWh or if you want to return any and get paid for them peanuts while paying taxes in the same time. This gives us flexibility and control of your costs, something that the energy company and the government most likely won't like.

So bottom line, producing your own energy sounds nice, but before jumping the wagon and cover your roof with solar panels, do a little math: how much is your consumption, so future estimations (if it will increase or not), how much you think it can be covered from your production, how much is the summer, how much in the winter. Take into consideration all the costs, including the maintenance over years (although low, you still to have them clean up from time to time - if someone else will be doing it, that it will cost you). Take into consideration that you're going to pay taxes on the produced kWh. And after that, find out in how many years you're going to break even. Is it 7?! Is it 15? Longer...? Investigating how to become truly independent of the network it might help in the long run.

No matter how, this electricity should make economically sense.

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