Government, allow homes to sell Electricity to UMEME

Ever since I installed solar panels onto my roof to supplement the power supply from UMEME, I cant help noticing the number of homes that have a hybrid electricity supply. The frequent failures of power supply from the main grid has led Ugandans to opt for renewable energy alternatives like Solar power.

Due to the good amount of sunshine we enjoy in Uganda, being at the equator, most well installed home Solar systems have surplus energy (at least mine has) that goes unutilised due to the limitations in consumption by the home systems. This energy can be used to generate extra income for the households if only someone bought it.

What brought me to this state of thinking was when I mulled over the possibility of selling some of my solar generated electricity to the neighbours. Upon consultation, I was told that I had to go through a detailed licensing process which only favoured million dollar companies. This led me to find out more about this matter online and that is when I came across the concept of Net Metering.

Net Metering is a billing system that allows electric customers to sell to their electric utility any excess electricity generated from their premises.

How does it work?

Electricity meters are traditionally designed to run in a single direction (say, clockwise) when measuring electricity usage on a premise. However, lately, there are meters that allow for two-way flow of electricity i.e into and out of the premises. These meters therefore can move both clockwise and anticlockwise. Let us say, the clockwise movement occurs when electricity flows from the utility to the premises while the anticlockwise movement occurs when electricity flows from the premises to the main grid.

The electricity supplied to the grid from the premises is then sold to other customers who have demand for it especially during peak times. The utility provider in this case UMEME through its installed systems should be able to invoice the customer accordingly with either a negative or positive balance.

Let us take the example of a home that has a hybrid system. Due to the need for ironing clothes and cooking, they still use main grid electricity of which they consume on average 50 units monthly. The installed solar system that supplies the indoor lights, outdoor security lights, home entertainment system among others yields at least 120 units monthly of which not more than 80 units are consumed. This leaves a balance of 40 units on the solar generated electricity per month. At an estimated retail rate of UGX 687/= per unit currently, this works out to a potential retail income of UGX 330,000/= annually. This is enough to buy 100Kg of rice which for a family that feeds on 5 Kg of rice weekly translates into Five months or 20 weeks supply.

Net Metering is rife in a number of countries like the USA, Canada, Denmark and Australia. Nicaragua is just revising its laws to cater for it too. In Africa, not much is known about efforts in this direction and this presents an opportunity to us as Uganda to pioneer.

Following reforms in the energy sector by the Ugandan Government, private sector players ventured into this space. They are largely concentrated in the production and distribution of electricity. Unfortunately, the Electricity Act of 1999 does not cater for Net Metering in anyway hence making it illegal if attempted.

With the growing push for increased electricity generation by the Government of Uganda, it would be prudent for a consideration of Net Metering as a way of cheaply filling in the gap of the energy deficiency faced. Take the case of only 5000 households each supplying at least 40 units of power to the main grid monthly. This converts to a retail income of nearly UGX 1.7 Billion annually, most of which gets paid to the participating households. Extrapolate this to 50,000 households and you get a picture of the potential impact. The cost of generating this electricity is much less than that from the exorbitantly expensive power projects that have been embarked upon like the thermal generators and some hydro-dams whose construction has been bungled up.

Naturally, I wouldn’t expect UMEME to be a fully cooperating ally in this endeavour because of the shortsighted fear of losing revenue. At one point, I used to spend more than UGX 200,000/= monthly on electricity bills. Today, I am always at pains to spend more than UGX 100,000/=. With my planned added investment in solar, I should bring this down to as low as UGX 30,000/=. The beauty with this increasing independence is that it allows energy that would have been utilised in consumption activities at the home to be diverted to production oriented industrial activities.

Some of the obvious benefits of Net Metering are;

• Increased adoption of renewable energy systems due to the potential of income generation for homes and businesses.

• Increased adoption by the consumers leads to a growth in the renewable energy industry with more investors setting up shop.

• Neighbourhoods could easily get self reliant in energy with Net Metering homes potentially powering other homes.

• Increase in renewable energy use will release pressure on the environment which is suffering from fossil fuels emissions.

• The Government benefits from added energy on the main grid without having to solely undertake the investment in production. This lowers the cost of production.

• New opportunities for innovation are likely to come up like the licensing of companies that undertake Net Metering contractual engagements with households.

What needs to be done?

First and foremost, the Electricity Act of 1999 needs to be amended to allow for new technological advances like Net Metering.

Secondly, there should be changes in the design of the current policies being pursued for electricity generation and distribution.

Finally, there is a need to design a proper structure for power compensations between households on the Net Metering initiative and the utility providers to prevent any form of manipulation.

Over to the Ministry of Energy and Mineral Development.

James Wire is a Small Business and Technology consultant based in Kampala, Uganda.

Follow @wirejames on Twitter

Email lunghabo [at] gmail.com