Hidden financial implications of the net energy metering practice in an isolated power system: Critical review and policy insights

This paper provides useful insights regarding the financial implications of the currently applied Net Energy Metering (NEM) practice in Cyprus through analyzing the implemented policy under: a) the customers’ perspective and b) the utility (Electricity Authority of Cyprus) perspective. These two perspectives are known in the scientific literature as the participant cost test and the utility cost test respectively. Within the paper, the financial analysis from the customers’ perspective, it embraces the impact resulting from a series of factors influencing the viability of net-metered PV systems’ investments. Furthermore, the analysis from the utility's perspective relates to the expected costs and benefits that EAC may experience due to the current NEM rules and applied charges. Finally, the key findings pertaining to the current NEM policy's hidden financial and policy implications are critically discussed. This discussion is performed to facilitate a more diligent NEM policy that will allow further penetration of roof-top PV systems through well-informed and transparent decisions.