Net Metering

Net metering in the Netherlands, known as salderingsregeling, allows prosumers to offset their electricity consumption by exporting surplus solar power to the grid at the same retail rate. However, the system will be phased out by 2027, gradually reducing the offsetting benefit and shifting towards a compensation-based model to encourage greater self-consumption and smarter energy management.

What is Net Metering?

Net metering is a billing mechanism that allows prosumers (those who both consume and produce electricity) to offset their energy consumption with the excess electricity they feed into the grid. By crediting surplus power at retail rates, net metering reduces electricity costs and promotes renewable energy adoption.

In the Netherlands, net metering – also known as netting or salderingsregeling – operates on a one-to-one basis, meaning prosumers can deduct the electricity they export from their total consumption at the same retail rate. This system has played a crucial role in driving the adoption of rooftop photovoltaic (PV) systems. However, the Dutch government has decided to phase out net metering by 2027, gradually reducing the offsetting benefit and shifting toward compensation-based remuneration for surplus energy, thereby encouraging smarter control of solar power.

Components of a net metering system

A net metering system enables residential and commercial solar energy producers to offset their electricity consumption by feeding excess energy back into the grid. The primary components of such a system include:

• Solar panels: These devices convert sunlight into direct current (DC) electricity.
• Inverter: This component transforms the DC electricity produced by the solar panels into alternating current (AC), which is compatible with the electrical grid and can be used by standard home or business appliances.
• Bi-directional meter: Also known as a net meter, this device measures both the electricity consumed from the grid and the excess electricity generated by the solar system that is fed back into the grid. It effectively "runs backward" when the system produces more energy than is being used, crediting the producer for the surplus.
• Utility grid connection: A connection to the local utility grid is essential for net metering, allowing for the exchange of electricity between the producer and the utility company. This setup ensures that when the solar system generates more electricity than needed, the surplus is sent to the grid and when the system underproduces, electricity can be drawn from the grid.

These components work together to facilitate the efficient production, conversion, measurement and distribution of solar energy within a net metering framework.

How does net metering work in the Netherlands?

In the Netherlands, the salderingsregeling (net metering scheme) allows small-scale energy producers, such as households and small businesses with solar panels, to offset the electricity they feed into the grid against their consumption on a one-to-one basis. This means that if you generate 3,000 kWh of electricity and consume 5,000 kWh in a year, you only pay for the remaining 2,000 kWh, effectively reducing your energy bill. The net metering scheme is set to end in 2027, after which a new arrangement will provide a reasonable compensation for the solar energy fed back into the grid.  

Currently, during the annual settlement with a household’s energy supplier, the total amount of electricity fed into the grid is subtracted from the total amount consumed, resulting in a net balance. If a prosumer has fed back more electricity than they used, their energy supplier compensates them for the difference.

While the current netting scheme operates on a straightforward one-to-one offset, the increasing adoption of dynamic electricity pricing – where rates vary based on supply and demand – may influence future compensation mechanisms. As the energy market evolves, integrating dynamic tariffs could encourage consumers to adjust their energy consumption to periods of lower prices, promoting grid stability and more efficient energy use.

Beyond just balancing electricity flow, net metering brings significant financial and environmental advantages.

The benefits of net metering

Net metering offers several advantages for both energy consumers and the broader community:

• Financial savings: By generating their own electricity, consumers can reduce their utility bills. Excess energy produced can be fed back into the grid, earning credits that offset future consumption, thereby shortening the payback period for renewable energy investments.
• Enhanced energy independence: Generating solar energy on-site allows consumers to rely less on external power sources, providing greater control over energy usage and costs.
• Environmental benefits: Increased adoption of renewable energy through net metering reduces reliance on fossil fuels, leading to lower greenhouse gas emissions and a smaller carbon footprint.
• Increasing the usage of solar power: In theory, feeding excess energy into the local grid could help to increase the share of solar power in the overall electricity mix. However, without the right incentives or flexibility mechanisms, mass feed-in of surplus power during periods of high solar generation lead to significant grid congestion, highlighting the need for a more balanced approach to distributed energy integration.

With cost savings, increased solar adoption and reduced grid dependence, net metering has played a vital role in the Netherlands's renewable energy transition. However, as the energy landscape evolves and grid stability becomes a growing concern, policymakers have gradually reshaped the system – leading to key changes that will redefine how solar energy is managed in the coming years.

A reverse chronological timeline of Salderingsregeling developments in the Netherlands

2027: The net metering mechanism is scheduled to be abolished on January 1, 2027. From this date, energy suppliers will determine the compensation for excess electricity fed into the grid.

2024: On December 17, 2024, the Dutch Senate ('Eerste Kamer') approved the law to terminate the salderingsregeling mechanism as of January 2027, after the House of Representatives ('Tweede Kamer') had already agreed in November.

2022: The new government minister for energy, Jetten, proposed postponing the start of the phase-out until 2025, while maintaining complete abolition by 2031.

2021: After the fall of the Rutte III government, the House of Representatives declared the phasing out of the net metering mechanism 'controversial', halting further consideration until a newly elected cabinet took office.

2020: A plan was introduced to gradually phase out the net metering system starting in 2023, with complete abolition by 2031.

2017: Minister Wiebes proposed replacing net metering with a 'feed-in subsidy', but the plan did not gain acceptance.

2013: The fixed upper limit of 5,000 kWh per year for salderingsregeling was removed, allowing consumers to feed in the same amount of energy as they consume and still benefit from net metering.

2011: The maximum amount of electricity eligible for net metering annually was increased to 5,000 kWh. Customers received a “reasonable compensation” for any excess above this limit.

2004: Net metering was officially enacted into law, with an initial maximum offset of 3,000 kWh per year. Prior to this, unofficial net metering occurred as older meters would run backward when energy was fed into the grid.

Net metering policy shifts: From incentives to phase-out (2025-2031)

The net metering policy in the Netherlands has evolved significantly since its introduction in 2004, with various amendments expanding or adjusting its scope over the years. However, the most decisive shift is set to take place between 2025 and 2031, as the government phases out the scheme entirely.

Phased reduction of net metering benefits

The Dutch government initially planned a gradual phase-out of salderingsregeling starting in 2025, with annual reductions until 2031. However, the latest policy update confirms that full net metering will remain in place until January 1, 2027, after which it will be abolished entirely. From 2027 onwards, energy suppliers will determine the compensation rate for excess electricity fed into the grid, with the government ensuring a "reasonable compensation" that will not be negative.  

Government objectives and impact on solar panel owners

The government’s decision to phase out net metering is driven by the need to make renewable energy subsidies more sustainable, as solar panel installation costs have significantly decreased over the years as adoption rates have soared. Another goal is to encourage self-consumption rather than causing excessive strain on the grid due to uncontrolled feed-in. Net metering has led to financial imbalances, where non-solar users indirectly subsidize solar owners. For solar panel owners, this means that excess electricity will no longer be credited at full retail rates, potentially increasing payback periods and making home energy storage and smart energy management solutions more valuable.  

Transition to self-consumption incentives and EU regulations

Instead of net metering, the government is expected to introduce incentives that promote a smarter, more flexible management of energy, for example for the purchase of energy storage systems (home batteries) to promote self-consumption (maximizing the use of locally-generated power) or dynamic energy pricing to better balance supply and demand. Additionally, EU regulations, such as the Renewable Energy Directive, influence national policies by encouraging market-based compensation schemes and ensuring a fair transition for prosumers across member states. These changes will likely push Dutch consumers and businesses toward smarter energy solutions, including energy management systems (EMS) and its residential counterpart, home energy management systems (HEMS), to optimize energy usage and costs.

These upcoming changes mark a shift from net metering to self-sufficiency optimization, reinforcing the need for advanced energy management solutions to navigate the evolving energy landscape.

Strategies for homeowners and businesses to adapt to net metering changes

With net metering set to be phased out by 2027, homeowners and businesses will need to explore new approaches for efficient energy management that align with the evolving energy landscape.

Maximizing self-consumption with smart energy management

Connecting PV systems with other assets

The first step to optimizing a house’s self-sufficiency is connecting the PV system to energy-consuming assets – electric vehicle chargers, batters and heat pumps – and the grid. This allows consumption devices to be intelligently charged by solar power at opportune times to minimize costs, maximize self-sufficiency and ensure the grid is not overloaded.

Smart energy storage solutions (home batteries): Installing battery energy storage systems allows for the storage of excess solar energy, making it available for use during periods of low production or high demand. This approach enhances energy independence and reduces reliance on the grid.  

• Dynamic EMS-driven load shifting: Utilizing an energy management system (EMS) enables the scheduling of high-energy-consuming appliances, such as heat pumps or electric cars, to operate when solar energy production is at its peak. This strategy ensures that the energy generated is consumed on-site, increasing self-consumption rates.  
• AI-driven energy analytics for predictive consumption patterns: Advanced EMS platforms equipped with artificial intelligence can analyze historical energy consumption data to predict future usage patterns. This predictive capability allows for proactive adjustments in energy consumption, aligning it more closely with energy generation and grid congestion.  

Time-of-use optimization with EMS

• Aligning electricity usage with variable tariffs: With the anticipated shift towards time-of-use pricing, EMS can be programmed to adjust energy consumption based on real-time electricity rates. By scheduling energy-intensive tasks during periods of lower tariffs, users can achieve significant cost savings.
• Automated load balancing to reduce grid reliance: An EMS can automatically balance the energy load within a facility by distributing energy usage evenly and preventing peak demand spikes. This automated load management minimizes dependence on the grid and optimizes the use of self-generated energy.  

By implementing these strategies, homeowners and businesses can effectively navigate the transition away from net metering, enhancing energy efficiency, reducing costs and contributing to a more sustainable energy ecosystem.

Expert insights on the future of net metering and distributed energy resources in the Netherlands

The Dutch energy landscape is undergoing a significant transformation, particularly with the planned phase-out of the net metering scheme by 2027. This shift is reshaping the Dutch power market and emphasizing the integration of distributed energy resources (DERs) and advanced energy management solutions.

Energy transition and the Dutch power market

The move away from net metering is part of a broader strategy to enhance grid stability and encourage self-consumption among energy producers. As the Dutch government phases out net metering, there is a growing emphasis on developing financial incentives to support PV system owners in increasing their self-consumption rates.

Role of HEMS and EMS in managing decentralized energy resources

Home energy management systems (HEMS) are becoming crucial in this smart, decentralized framework. These systems enable consumers to monitor and control their energy usage, optimize the performance of DERs and facilitate demand response initiatives. By leveraging HEMS, users can align their energy consumption with generation patterns, thereby reducing grid congestion and lowering and enhancing energy efficiency.

Increasing importance of grid balancing services for businesses

For businesses, the phase-out of net metering highlights the need for effective grid balancing services. Implementing advanced EMS allows for automated load management, peak shaving and strategic energy storage utilization. These measures not only contribute to grid stability but also offer cost savings by minimizing demand charges and optimizing energy procurement strategies.

Peer-to-peer energy trading and local energy communities

Looking ahead, peer-to-peer (P2P) energy trading platforms and the formation of local energy communities are anticipated to play a significant role in the Dutch energy market. P2P trading enables consumers to buy and sell excess energy directly, fostering a more resilient and decentralized energy system. Local energy communities can collaboratively manage energy resources, optimize collective self-consumption and invest in shared renewable projects, thereby enhancing energy autonomy and sustainability.

Vehicle-to-Grid (V2G) solutions as a buffer for excess solar energy

Vehicle-to-Grid (V2G) technology presents another promising avenue, allowing electric vehicles (EVs) to serve as mobile energy storage units. By discharging stored energy back to the grid during peak demand periods, V2G solutions can buffer excess solar production, support grid stability and provide additional revenue streams for EV owners.

The Netherlands's energy transition is steering towards a more decentralized and efficient system, with advanced energy management technologies and innovative market structures at its core. As Energy Market Expert Irene Guerra Gil notes, "The integration of distributed energy resources necessitates a paradigm shift in how we manage and consume energy, placing greater emphasis on flexibility, digitalization and consumer engagement."