The much anticipated net metering in Lithuania has hit a major snag from the very start – the introduced network operator service fee of 0.031 euros ($0.035) per 1 kWh is too high and can snuff out any solar gleam.
“We have been lobbying for a fee of 0.015 euro ($0.016) per 1 kWh, but the National Commission for Energy Control and Prices (NCC), the regulator, has doubled it,” Vitas Maciulis, president of Lithuania’s Solar Energy Association (LSEA), told Renewable Energy World. “Installing rooftop photovoltaic (PV) panels does not make much sense now.”
He noted, however, that NCC has given in “little” to the solar sector’s demands and reduced the service fee from the initial proposal of 0.040 euros ($0.046) per 1 kWh to 0.031 euros per kWh.
According to the Maciulis, with the fee of $0.035, the payoff period for PV panels will increase up to 16 years. With a rate of 0.015 euro ($0.016) the payoff period would be between 10 years and12 years.
It is too long, as most of the solar installations in Lithuania last from 15 years to 20 years, Maciulis noted.
Disappointed, Lithuanian solar developers point to Western Europe, where the electric network operator service fee is far lower than that in Lithuania.
Lithuanian power grid operator Lesto has received 312 applications to install rooftop PV installations ahead of the NCC fee ruling. All the applicants have paid a symbolic sign-up fee.
“It is about the Lithuanian mentality: first, take on a novelty and then see how it plays out,” Maciulis said.
Lithuania at then end of 2014 passed amendments to the Renewable Energy Law allowing net-metering.
According to the new law, excess electricity produced by a solar generating facility can be delivered to a grid operator’s network and sent back free to self-generating customers when electricity is not produced. Only those generating facilities that are smaller than 10 kW will be eligible for net metering. The unused portion of solar energy from the preceding month will be carried over to the following month. Meanwhile, the surplus of the preceding year of electricity produced by self-generating customers will not be transferred to following year.
The law promoting solar energy came into force last March with the Baltic country allotting its 60 municipalities 10 MW in net metering capacity.
Whether that capacity will be used remains in question.
“Local energy policy makers do not think ‘green’ in this country,” Arvydas Jakubauskas, a solar developer, told Renewable Energy World. “Lithuania is obviously a lot more concerned about the LNG terminal and grid interconnectors with Poland and Sweden – not about solar power, which is insignificant at less than 1 percent of the country’s energy mix. The introduced network operator service fee does not encourage homeowners to consider rooftop PV installations.”
Martynas Nagevicius, president of Lithuania’s Renewable Energy Enterprise Confederation (LAIEK), agrees.
He said that “only public and nonprofit organizations,” which count on EU financial aid, will be installing rooftop solar panels.
A top executive of a Lithuanian PV panel manufacturer told Renewable Energy World, on the condition of anonymity, that with the introduced fee, the payoff period will be “too long” and will discourage many homeowners.
“The operator is clearly giving in to pressure and serving the interests of the big energy players out there,” he said.
The fight for Lithuanian solar developers is not over yet.
In a recent hearing by the Energy Commission of the Lithuanian Parliament, the lawmakers have obliged the Energy Ministry to come up with proposals aiming to make solar energy more attractive in the country.
Meanwhile, the LSEA wants the grid operator to be acknowledged not only as the service provider for rooftop PV owners, but also as the beneficiary of the service.
“We are also asking to allow all to take on net metering, not only home owners and nonprofit organizations,” Maciulis said.
Kestutis Dauksys, a Lithuanian parliamentarian, believes the state needs “to rethink” its renewable energy policy.
“The first step in that direction would be simplification of the administration of renewable energy installations, including those of solar energy,” he told Renewable Energy World. “The administrative costs are often higher than all the other charges.”
He said that the state can help net metering by covering some of the grid interconnection costs.
Lead image: The Lithuanian parliament building in Vilnius Credit: Shutterstock