Tell them from the rooftops – earning money by generating power
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Solar installations on the roofs of Russian homes could soon become commonplace.

New regulations permit small businesses – and ordinary residents — to sell electricity produced by their own installations. Now any resident of Russia can buy a solar panel or a wind installation and place it on the roof or on a piece of land and not only supply his own energy, but also earn some money. But will selling one’s electricity to the grid actually work?

    A government order was issued in the spring setting down the terms for connecting electrical microgenerators to the grid. The law on microgeneration was actually passed at the end of 2019 formally allowing residents and enterprises to supply different volumes of power to the grid – up to 15 Kw. But the enabling document setting down the mechanism has only just been put in place.

    How it works

     There are, essentially, no restrictions on the type of generating device that can be used. You can install whatever you like with the exception, so it would seem, of a nuclear reactor. But experts believe that the most likely options of microgeneration remain solar or wind installations.

     A microgeneration device produces electricity and supplies it to the grid – up to 15 KW in capacity at any single moment. But experts believe that installations could actually have a greater capacity.

    According to Dmity Stepanov, deputy director of the Altren company (Russian centre of competence on renewable energy), the cost of installing a device is 550 roubles ($7.40) – and if connected immediately to the system of a house under construction, a solar panel would cost about 1,100 roubles.

    This rate applies not only to residents but also to businesses and factories owning micro generators. You could also connect a solar panel to a house already connected to the grid or connect the house and the panel at the same time. But connecting a panel without a connected home would not be possible.

    “The network company is obliged to connect the microgeneration device regardless of whether the technological requirements are there or not just as it is obliged to provide electricity to a home requesting it,” Stepanov said in a webinar devoted to changes in legislation.

    The network company also installs the meter – although “smart” meters are obligatory only from next year, they are required right now for microgenerators.

    Installing a wind device on the roof or a solar panel on the balcony of a multi-unit apartment building is not possible at the moment. For now, the government order concerns only private houses or plots of land. That is because of the large numbers of property owners in multi-unit apartment buildings and difficulties in working out an agreement and finding common ground.

    Things that can go wrong

    Connecting a device to the grid without a house must be done within a month – if the connection involves a microgenerating device or an energy receiving device – it is four to six months. Energy supply companies are now required to draw up an agreement on purchase and sale of electricity. And the first such requests for technical connections have already been received, said Nikolai Popov, General Director of Hevel Retail – the biggest producer of solar panels in Russia.

    But for the moment, the system of concluding agreements has not been completely sorted out.

    Nikolai Driga, technical director of the Solntse Dom company, says these include delays in providing an agreement or the imposing of additional services requiring payment.

    “We are already getting indications of that sort,” Driga said.

    Experts say, however, that imposing such obligations is explicitly prohibited by the legislation as is a refusal to provide service. They point to a complaints system for such instances.

   What does it cost to get power to a country home?

    Taking account of energy consumption generally take place monthly. Energy used for consumption is accounted for and any surplus is bought by the power supply company according to an established rate.

    The price at which the energy supplier buys from the owner of the generator is calculated according to a straightforward formula.

    “The volume of energy subject to payment from either side is calculated monthly as the difference between the flows from one side to the other. Whoever ends up owing money pays,” Drigli said.

    “If the consumer owes for the preceding month’s volume from the supply company, he pays for the difference remaining after subtraction – according to the standard rate. If the (owner of the generator) has sent more than he received, it is the supply company that pays according to the formula set down in the regulations.”

    According to experts in the sector, the wholesale price of purchase in European Russia will be no less than 2 roubles per KWh. The purchase prices varies from region to region. In European Russia, this will be the wholesale price – but in other isolated electricity systems – it will be the minimal production cost of power.

    Drigli said that in Russia’s southern regions, where rates are higher – the purchase price will be 2.5-3 roubles.

    “In other regions it will be a little cheaper,” Driga said. “But it is unlikely the price will go below 2 roubles in the European part.

    Stepanov said the price of securing power guaranteed by a supplier in central Russia stood at 2-2.5 roubles, while the rate in Siberia is 2 roubles.  In non-tariff zones it will be 1.5-2 roubles. In some isolated regions it could hit 30-40 roubles or higher. And the production price of wind or solar power in those isolated areas already stands at 15-20 roubles if produced by solar installations and 10-15 roubles if produced by wind installations in coastal areas, he said. And the cost of power produced by a diesel station could amount to 40 roubles.

    And it is not yet clear how payment will be made when dual tariff meters are used.

    In theory, in a house with solar panels, where energy is consumed mainly in the evening but produced during the day, the power could be sold at the more expensive day tariff and bought at the cheaper night tariff, Stepanov said.

    “This could possibly be a source of income,” he said.

    No explanation has yet been supplied, but experts believe that surpluses will be paid off on the basis of some average value.

        Why and who benefits?

        “It is simply a good way for microgeneration to function in a normal fashion within the structure of Russian power generation,” said Popov from Hevel.

        “What was adopted is a good foundation for further development and stimulation of just this sort of generation, electricity storage through the grid. (Russian power company) Rosseti will become a big storage facility for those who deal with microgeneration.”

     He said new regulations were needed for small business.

     “Farmers, small and medium-sized businesses, retail – these will be the main consumers in this,” he said.

    At the moment, Popov said, electricity for this category of consumer stands at about 11 roubles per kilowatt hour – while production costs of power produced by solar sources, including capital expenditure over 25 years (the average working life of an installation), could amount to 3-4 roubles per kWh.

     As Driga explained, in Krasnodar region in southern Russia, businesses pay 9-10 roubles per kWh. But the region is often subject to accidents and power disruptions. He believed that businesses in the Kuban region could recover their investment in four to five years.

    For ordinary citizens, the situation is somewhat different. At issue here, experts believe, is not so much a source of income as improved reliability and reduced costs for power.

    Driga, who lived for seven years in an autonomous house in southern Russia, said that from the end of March until November, he observed a surplus of energy. Other private homes noted the same, particularly owners of dachas, or country homes.

    The new legislation enables the grid to avoid working needlessly and allows consumers to sell energy they don’t need and to cut expenses.

    “I have every reason to believe that if the law is going to work the way it was supposed to, you could end up with a number of situations like this: someone carries on without paying and with no need to think about power cuts,” he said. “For a private house, there is little point in talking about income – it’s more a matter of comfort and reducing expenses in looking after your house.”

    More equipment needed

    Experts are agreed on this: microgeneration will grow in Russia and along with it the need for equipment, including equipment made in Russia.

    “If you look strictly at deliveries of solar modules, there is absolutely no question. The market is growing very rapidly, particularly that segment of 11 roubles per kWh,” Popov said.

     As tariffs rise and the cost of production of renewable energy sources and of energy storage systems decline, he said. people will begin to transition to their own solar installations. Later, they will start to look into storage systems and considering the different rates.

     And we can expect growth in the number of Russian producers of equipment for solar and wind generation. There are already some 70 different producers of solar panels.

    Driga says he is already receiving requests from wind generation operators that work without energy storage systems.

    Some experts propose stimulating the development of microgenerarion through targeted credits for the purchase of equipment for renewable energy as well as improving energy efficiency.     Perhaps more thought can be devoted to this as it is no inexpensive undertaking for the average citizen to consider renewable energy installations. For example, Popov said his company at the moment sells a solar power set for 10 Kw for 390,000 roubles ($5,220) – with a 40 % discount. And if demand for microgeneration solidifies in Russia, prices for equipment will gradually come down.

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