PV adoption: the role of distribution tariffs under net metering

Journal of Regulatory Economics - The deployment of decentralized productions units (DPU) like rooftop solar panels is a major challenge for a transition towards greener energy sources. Under a net...     

The role of market-oriented institutions in the deployment of renewable energies: evidences from Europe

Focusing on European countries, this article investigates the link between market-oriented institutions, as measured by the Economic Freedom Index, and the production of energy from renewable sources. A dynamic panel approach shows that this correlation is positive and significant while the subcomponents of the Economic Freedom Index reveal that not all market-oriented institutions have a similar impact. Indeed, long-term price stability and freedom to trade boost the reliance on renewable energies whereas the importance given to markets rather than governments has no significant impact.     

The prosumers and the grid

Prosumers are households that are both producers and consumers of electricity. A prosumer has a grid-connected decentralized production unit and makes two types of exchanges with the grid: energy imports when the local production is insufficient to match the local consumption and energy exports when local production exceeds it. There exists two systems to measure the exchanges: a net metering system that uses a single meter to measure the balance between exports and imports and a net purchasing system that uses two meters to measure separately power exports and imports. Both systems are currently used for residential consumption. We build a model to compare the two metering systems. Under net metering, the price of exports paid to prosumers is implicitly set at the price of the electricity that they import. We show that net metering leads to (1) too many prosumers, (2) a decrease in the bills of prosumers, compensated via a higher bill for traditional consumers, and (3) a lack of incentives to synchronize local production and consumption.