Cut power bills by 40 per cent via rooftop solar: AER

NEW IMPETUS: Authority approves incentive-based tariffs to encourage implementation of ambitious ‘Sahim’ programme

The Authority for Electricity Regulation Oman (AER) has approved an incentive-based tariff system that will enable residential customers to slash their annual electricity bills by around 40 per cent when they install grid-connected solar photovoltaic (PV) systems on their rooftops, a highlevel official has revealed.

Eng Hilal al Ghaithi (pictured), Deputy Director of Customer Affairs, said that any surplus power exported back into the grid will be remunerated at prevailing Bulk Supply Tariffs (BST), which are higher than the electricity tariffs for residential customers — a feature designed to incentivise the rollout of rooftop solar capacity under the Authority’s ‘Sahim’ initiative.

“The Authority h a s approved a tariff system that encourages customers to go in for rooftop systems initially for selfsupply,” said Al Ghaithi.

“However, if they have any surplus output from their systems, they will be allowed to automatically inject this surplus into the grid. They will be remunerated for any exported energy based on bulk supply tariffs, which are exactly the tariffs paid by the bulk supply companies to the procurement company (OPWP) — which in turn are higher than the residential tariffs. Customers will have a greater incentive to install solar rooftop systems as they will be financially remunerated for any surplus power exported into the grid.”

The official, who also heads the Authority’s ‘Sahim’ programme — an initiative that champions the widespread deployment of rooftop solar systems — made the comments at a recent forum on ‘Energy & Water’ held in the city.

He clarified however: “This is not net metering! (a billing system that offers a credit to customers making excess contributions back into the grid). It’s basically financial remuneration for excess power fed automatically into the grid. This remuneration is not fixed; it is revised and published on an annual basis, based on figures initially prepared by Oman Power and Water Procurement Company (OPWP) and approved by the Authority every year.”

Preceding the full-fledged launch of the ambitious, nationwide Sahim programme, the Authority plans to conduct a pilot phase targeting between 1,000 and 3,000 homes in Muscat Governorate, according to the official.

The pilot phase will be tendered out to interested developers sometime between the end of Q3 and beginning of Q4 of this year, he said.

In preparation for this pilot, the Authority is drafting new regulations and guidelines designed to help distribution and supply companies to agree contractual terms with potential developers, who will be responsible for investing, funding, operating and maintaining the rooftop solar PV systems on residential homes, said Al Ghaithi.

Furthermore, the Authority is working on a ‘Customer Recruitment Plan’ aimed at encouraging residential customers to sign up to be part of the pilot phase. “Once the customers agree to participate, we will make their details available to the bidders. We will also be floating very shortly a Request for Proposals (RFP) for the hiring of a Technical Adviser to assist the Authority in this tendering process.”

Significantly, the Authority is prioritising the residential segment of the electricity market for rooftop solar implementation because of its dominant share in power consumption — pegged at a hefty 47 per cent. Residential customers accounted for RO 370 million of the total subsidy of RO 510 million disbursed by the government to the sector in 2016, he said.

“Residential customers have no incentive at present to opt for rooftop solar systems because of the cheap cost of electricity. That’s why we are working on the residential PV programme to tackle this issue and help the customers adopt solutions that generate significant benefits to the country. This includes major savings in natural gas. Studies have shown that if only 10 per cent of residential homes in the country opt to install rooftop capacity, around two billion cubic metres of natural gas will be saved over a 25-year period. Besides, customers will be able to reduce their electricity bills by an average of 40 per cent on an annual basis by installing rooftop solar systems,” he added.