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Consumers considering buying solar panels appear to be holding off their decision for a while. Installation companies have noticed a sharp decline in applications since the summer, ranging from 30 percent to as much as 90 percent less. This doubt is expected to stem from uncertainty about the government's phasing out of the balancing scheme, and the levy announced by energy provider Vandebron for people who feed power back into the grid. Change Inc. looked into this issue for you. And what it turns out: despite the developments, a solar panel still seems to pay off. But both the government and energy suppliers need to open up quickly.

Solar panels last about 25 years on average | Credit: Getty Images

To reach that conclusion, it is first necessary to explain some concepts. Starting with the net-metering scheme. It was introduced by the government in 2004 to spur the purchase of solar panels. Households and small businesses with solar panels can feed energy back into the grid at times when they do not need their own generated energy. Energy companies must then offset the returned energy against the consumption of the households and businesses. This lowers their energy bills, which recoups the investment costs of the solar panels and ultimately provides a financial return.

The scheme proved successful: the payback period for solar panels was ultimately about 7 years, while they last about 25 years. So a nice 18 years to make money. The government therefore decided that the net-metering scheme was no longer necessary, and that it could be phased out. The phase-out path should begin in 2025 and end in 2031. In that year, solar panel owners will no longer be able to offset the electricity they supply back against their consumption.

Energy more expensive for everyone

To this end, the government cites the following reasoning. First of all, solar panels are becoming cheaper and more efficient, so they generate more money. The disappearance of the scheme partly because of this means that it is not the case that solar panels no longer yield any money over their entire lifetime. In addition, the government indicates that the net-metering scheme leads to less tax revenue. Also, because of the scheme, energy companies incur more costs, which they would pass on to their customers - including those without solar panels. As a result, you could say that people without solar panels pay for those with them.

1 to 2 years longer pay off

According to the business organization Techniek Nederland, the phasing out of the energy-saving scheme will not make solar panels no longer a profitable investment. Where the panels now earn themselves back within 7 years, it will be 1 to 2 years longer after the reduction. However, the organization does indicate that a political decision must be made soon. This is because the Cabinet decision still has to be approved by the Senate, and that has been some time coming. This is not good for consumer confidence, thinks Doekle Terpstra, chairman of Techniek Nederland: "The discussion is already taking far too long and bringing uncertainty. Consumers are now totally unnecessarily postponing the purchase of solar panels. That does not help us to achieve the climate goals".

Techniek Nederland also advises solar panel owners to be more aware of their energy consumption. Indeed, this can further increase the profitability of solar panels. By using the generated solar energy themselves as much as possible, they need to buy as little energy as possible at times when their panels do not provide enough. This can be done, for example, by turning on washing machines and dryers in the middle of the day, at times when the sun is shining. There are already systems that allow solar panels to control this automatically. Home batteries can also help store the energy generated and use it later.

Covering costs

But: with only the net-metering scheme, the whole story has not been told. In fact, energy provider Vandebron recently announced that it will introduce a levy for solar panel owners who feed power back into the grid. Vandebron is forced to do so, it claims, because the challenges associated with solar power are mounting. "For example, the cost of delivering energy back to the grid in the Netherlands is getting higher and higher. Moreover, the distribution of these costs is starting to become skewed."

Under traditional energy contracts, a solar panel owner gets as much money for a unit of energy delivered back to the grid as he pays for a unit of purchased energy. For that purchased energy, an energy supplier pays money on the energy market. But that price fluctuates daily due to changes in supply. Because of this, it happens that an energy supplier buys expensive fossil energy, and has to offset that against the cheap solar energy supplied back. This costs the supplier money; these are costs that the announced feed-in tax is intended to cover.

It is suspected that other energy suppliers will follow Vandebron's example; Tweakers reports that several energy suppliers are already raising their prices, but in a less transparent manner. For example, by removing welcome discounts or increasing fixed supply costs.

Dangerous combination?

MilieuCentraal earlier warned that a declining net-metering scheme combined with the feed-in tax could jeopardize the profitability of solar panels. The payback period would then increase from 8 to over 25 years. In other words: just (not) feasible within the lifetime of average panels. But according to energy company Zonneplan, it is not realistic that both factors will play simultaneously. "MilieuCentraal makes a fallacy. Because although the information organization's calculation example is correct, both schemes will never coexist. After all, the feed-in tax is the answer to the existence of the balancing scheme."

Vandebron itself indicates that the feed-in tax is not directly linked to the net-metering scheme, but it does leave room for any change in policy. Commenting on an article by SolarMagazine, the organization says: "In principle, the fixed feed-in charge is a fixed component for solar panel owners at Vandebron. But like the fixed supply costs, these costs can be adjusted based on dynamic market conditions as the energy market changes. The market is difficult to predict."

Certainty important

It would be beneficial for people unsure about solar panels if suppliers like Vandebron excluded the combined scenario. Because the feed-in costs for energy suppliers are expected to go away with the phasing out of the balancing scheme, a feed-in tax is no longer necessary. Certainty about this, combined with a quick decision by the Senate, offers consumers more perspective.

No reason to worry

In conclusion, therefore, it seems that despite recent developments, the purchase of solar panels is still a financially attractive choice. The disappearance of the net-metering scheme alone does not appear to be a legitimate cause for concern. The combination with a feed-in tax could lead to problems, but that scenario seems unlikely. So for now, no reason to worry about buying your solar panels.

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