Source: TrendForce
On November 14, 2024, the Dutch Lower House officially approved the cancellation of the net metering policy for residential solar systems, set to take effect in 2027. However, the policy still requires approval from the Upper House before it becomes law.
The net metering policy has primarily benefited residential solar systems under 35 kW, allowing consumers to send excess electricity back to the grid and receive compensation or offsets based on the difference between their consumption and generation.
Introduced in 2004, the policy initially offered full compensation for excess energy. However, the over-encouraged market put significant strain on government finances. In 2018, the Dutch Ministry of Economic Affairs and Climate Policy decided to phase out net metering by 2020 in favor of new renewable energy policies. Despite initial plans, the government reversed its decision under public pressure and reduced the subsidy rate by 9% annually, intending to phase it out completely by 2032.
The current decision to end net metering stems from growing challenges in the Dutch energy system, such as grid congestion and increased development costs for residential solar systems. By mid-2023, grid congestion had worsened due to a surge in residential solar installations, exacerbated by the energy crisis.
Reports from grid operators indicated that much of the country’s grid is already at full capacity, leading to longer delays for new solar projects seeking grid connections.
Moreover, limited available roof space and additional grid fees have hampered the growth of residential solar. According to RVO (Netherlands Enterprise Agency), approximately 50% of rooftops are suitable for solar panels, but only 8% are immediately available for installation due to additional costs required for roof modifications and grid connections. The cost of connecting a solar system to the grid currently ranges from €100 to €697, depending on system size, which further increases the overall cost for homeowners.
As a result, the Dutch government is shifting focus towards self-consumption and energy storage systems to address grid congestion. Research from CE Delft and TNO suggests that without net metering, the payback period for solar systems may increase from 7-9 years to 12-17 years. However, if the self-consumption rate exceeds 60%, this period could drop back to 8-9 years. The solar industry is calling for new fiscal incentives to encourage self-consumption, and energy storage associations are advocating for subsidies to support storage solutions as a way to replace the net metering system.
With the cancellation of the net metering policy, the future of residential solar in the Netherlands will likely center around self-consumption systems and energy storage solutions. These changes aim to alleviate grid congestion while continuing to promote renewable energy adoption.
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