Portugal's net-metering law raises faint hopes

Portugal's net-metering law raises faint hopes

According to a report published last week by Portugal's energy regulator, the Direccao Geral de Energia e Geologia (DGEG), the country added 16 MW of new solar PV installations from July to September 2014. Cumulative PV capacity in Portugal has now reached 346 MW, of which 47 MW were installed in the first nine months of the year.

Portugal's record of new PV installations is low given the country's excellent solar resource, but the figure at least remains relatively steady. In 2013 and 2012, the country installed 55 MW and 69 MW of new solar PV systems respectively.

Net-metering law approved 
Portugal's PV sector lags massively behind its wind sector, which at the end of September had installed an impressive 4.818 GW of capacity.

By contrast, the country's PV sector in the last four years has been driven primarily by small (so-called micro and mini) systems. Specifically, this PV market fragment amounts today to around 155 MW of installations nationwide.

A worrying trend, however, is that the rate of new micro and mini installations in 2014 has been decreasing compared to previous years. Because of this, the Decreto Lei n. 153/2014 net-metering law approved recently by the Portuguese government is welcome. The new law allows investors to install PV systems up to 250 KW for covering their own electricity needs, and to sell excess power to the grid. The grid operator will also keep 10% of the sale to cover the costs of maintaining the grid.

PV expectations remain faint 
However, although the net-metering scheme is expected to increase competition in the energy and PV markets, it will barely provide the boost that PV sector requires. For this to happen, the country needs a separate, ambitious net-metering target that is not currently in place.

Instead, the induced competition between the net-metering and the FIT-based micro and mini systems is considered a positive impact for the electricity market.

Following the introduction of FIT cuts for micro and mini PV systems a year ago, Maria José Espírito Santo of Portugal's energy regulator DGEG told pv magazine that DGEG wanted the net-metering program to compete with micro and mini production, reflecting on the evolution of the energy market prices.

Furthermore, Espírito Santo added, while in the past the DGEG applied FIT cuts "to adjust the tariffs to the market evolution of the price of PV power plants and their main components", the logic behind the cuts has now been changed with "the main purpose being to discourage the FIT regimes for microproduction and miniproduction programs." Given this, Portugal's PV sector should soon expect DGEG to announce new FIT cuts, attempting to bring FITs down to what net-metering pays.

Portugal has a target to install 670 MW of solar PV by 2020. The net-metering law makes it very plausible this to be filled with net-metering systems. But is this target enough? This is the question that Portuguese policy-makers should begin asking.

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