Pros and Cons of Gross Metering
Planning to get a solar system but confused about the intricacies of Gross Metering? Well, you have landed at the right place. In this article, we are going to talk about Gross Metering, how exactly it works, and what are its pros and cons.
It’s 2020 and electricity production has become easier than ever before; easier to an extent that people are doing electricity production from their homes. Yes, we’re talking about Solar Energy here. The use of Solar energy to generate electricity has drastically increased in the last few years.
And in case of a country like India where sunlight is available in abundance, this alternative means of energy production has well to do scope. Currently, the solar energy production capacity of India stands around 31,000+ MWs and the figure is likely to cross the mark of 1,00,000 by the end of 2025.
One of the major reasons for this substantial growth is the introduction and use of the grid system. Since storing solar energy all in all is an expensive exercise, use of grid system makes the implementation cheaper and easier.
The Grid system involves a network of solar systems that are connected to a grid. This grid arrangement is further classified into 2 sorts. One is Gross metering and the other one is Net metering.
What is Gross Metering?
Gross metering is an arrangement under which the consumer is paid as per the predetermined tariff for the total number of solar units contributed to the grid. While one is also ought to pay the distribution company for the electricity consumed from the grid at the retail supply tariff.
While Net metering refers to the adjustment under which the energy exports are adjusted against the imports. Generally, this type of meter accounts for both imports and exports of energy from the installation. If the exported power is higher than the imported one, the consumer gets compensated for the difference from the supplying company and vice-versa.
Let’s dig deeper into some pros and cons of Gross Metering.
What are the pros of Gross Metering?
Gross metering is slightly more beneficial than Net Metering, when it comes to financial benefits. The ROI from Gross metering arrangement is fixed for the next 25 years, as well as the amount of energy to be generated and exported is fixed, while in the case of Net Metering, the returns thoroughly depend upon the savings of the electricity.
It’s true that the Net meters have much greater potential when it comes to returns. However, gross metering seems to be a better alternative for bigger energy consumption requirements. If you are planning to get high returns in the initial returns and your requirements are on a big scale, Gross Metering is the option for you.
What are the cons of Gross Metering?
If we talk about the long term benefits, Net Metering definitely has the upper hand. In Gross Metering, you will be billed for your cumulative electricity consumption, and you will be paid for the “gross amount of electricity” you pumped into the grid. That means you’ll be billed twice. But in Net Metering, only one bill is generated which gives a measure of both the total consumption and export done by you.
Also, the people who are right now planning to install an arrangement might not opt for gross metering because of its tariff rates. Which are currently around 6-8c/kWh in most of the regions. It is recommended to get the cost comparision done from a professional.
Confused about what suits your requirements the best? Contact us and talk to an expert today.