Regulator investigates negative feed-in fee for solar power

Consumers who annually feed back more electricity than they take in pay more for this with some suppliers than they receive. This is the finding of the Authority Consumer & Market (ACM). While in the current bill for the Energy Act, partly in the interests of the energy transition, the Lower House has added a ban on negative feed-in compensation. The ACM will now investigate this further.

Negative feed-in allowance

Consumers and small business consumers with solar panels can offset (strip off) the electricity they purchase from their energy supplier on their annual statement with the electricity they feed back into the grid. And if they supply more back on an annual basis than they take in, they are entitled to a reasonable compensation from their supplier. That feed-in fee is set by suppliers themselves. Since this year, many suppliers charge a fee for feeding electricity back to the grid (feed-in fee). Now it turns out that people end up with a negative balance with different suppliers, because after balancing, the fee per kWh is lower than the feed-in costs per kWh. The ACM will now further investigate the relationship between fees and feed-in costs.

Earlier this year, the ACM did research to the rates of 4 major energy suppliers and concluded then that the rates examined were not unreasonable. But since then, feed-in tariffs have increased market-wide. Under current legislation, energy suppliers are free to set their tariffs as long as they are not unreasonable given the underlying costs. Given the increased feed-in costs, the ACM is going to pay extra attention to their level in its tariff supervision.

Higher rates model contracts

The ACM will also investigate the tariffs of model contracts. Model contracts are standard contracts with variable indefinite tariffs that all energy suppliers must offer. The ACM sets the terms of the model contract. It allows consumers to always have a contract for the supply of gas and electricity. It also increases the comparability of contracts.

Higher rates

The August Energy Consumer Market Monitor shows that model contracts are more expensive than other variable contracts. With model contracts, suppliers are not allowed to pass on the costs they incur for households with solar panels through feed-in tariffs. Partly because of this, many suppliers have increased the fixed fee, or the fixed delivery costs per month, of model contracts in recent months. As a result, customers with and without solar panels are paying higher tariffs if they have a model contract. To ensure that the model contract remains a reasonable alternative for consumers, the ACM is scrutinizing the rates and conditions.

In addition, the ACM is going to review the existing model contract, in part because of the arrival of the new Energy Act. One question, for example, is whether suppliers should be allowed to charge feed-in fees in model contracts.