CHAPTER I

THE PROBLEM AND ITS BACKGROUND

Introduction

Managing the diminishing fossil fuel reserves and climate change are two of the biggest

challenges facing the planet today. As a major source of electrical power generation fossil

fuels are depleting day by day and also its usage raises serious environmental concerns.

Electricity plays an important role in our everyday life. Electricity is all around us–powering

technology like our cell phones, computers, lights, soldering irons, and air conditioners

that makes it one of our basically needs. It has been a worldwide concern as setbacks on

energy production on nonrenewable source become very evident. Many people now resort

in using alternatives for their needs. These reasons force the development of new energy

sources which are renewable and ecologically safe. The Philippines cannot afford to delay

much longer a transition to RE if it is to sustain development and avoid the catastrophic

impact of climate change, of which the energy industry is a leading contributor. Weaning

the Philippines from fossils and transitioning to RE is a change that government has to do

if it is to sustain development and progress for every Filipino.

The Philippines enjoys a sizeable amount of sunshine that has not been utilized to its

potential. According to the Department of Energy, the country can harness the sun’s power

as its radiation across the country has a power generation potential of 4.5 to 5.5 kWh per

square meter per day. Moreover, solar panel pricings are rapidly decreasing. With that,

every on grid private household and company can utilize the power of the sun with solar

panels on their own roofs. The Philippines is well positioned for solar energy, not just in

terms of geography. It also has a lot of room to take advantage of the investments and

jobs that can be created by future solar power installations, as well as look forward to
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BATANGAS II ELECTRIC COOPERATIVE, INC. (BATELEC II)
CUSTOMERS GRID TIED SOLAR SYSTEM
De Guzman, M.A.I., Mabini, J.M.A., Mendoza, L.L.T.

cheaper and cleaner power that is not affected by geopolitics. Reducing fuel consumption

makes solar an economically viable electricity source for Philippine consumers and

industries. [1]

The development the country’s renewable energy resources has been an integral part

of the national strategy to enhance energy security and reduce harmful emissions from

the use of fossil fuels. With the country’s renewable energy resource potential estimated

at around 250,000 MW, the Philippine Department of Energy under its National

Renewable Energy Plan (NREP) set an ambitious target of increasing the total renewable
[37]
energy installed capacity to around 15,300 MW by 2030. In a more recent policy

document, the Renewable Energy Road Map 2017-2040, the Government aims to

increase the renewable installed capacity to 20,000 MW by 2040. [53]

This paves way to the introduction of the Net-Metering scheme. The scheme

represents the first step of a paradigm shift from the traditional generation-transmission-

distribution scheme towards individual and community based distributed on-site power

generation. The Net-Metering is the first non-fiscal incentive mechanism fully implemented

under the Renewable Energy (RE) Act of 2008.Through the installation of solar

photovoltaic (PV) panels up to 100 kW, house owners and commercial establishments

can now partly satisfy their electricity demand by themselves. Excess power generated

from the solar PV installation will be delivered to the local distribution grid of the electric

distribution utility and will be used to offset the end-user’s electricity consumption.[2] In

other words, end-users become “prosumers” or producers and consumers of electricity at

the same time. In effect, end-users are able to generate savings on their electricity bill and

protect themselves against rising electricity prices. What is great to this cause is that end-

users can help mitigate the effects of climate change through the use of clean energy

technologies. It will also contribute in lessening the country’s dependence on costly

EVALUATION OF NET METERING UTILIZATION SCHEME OF CHAPTER I: THE PROBLEM AND ITS BACKGROUND | 3
BATANGAS II ELECTRIC COOPERATIVE, INC. (BATELEC II)
CUSTOMERS GRID TIED SOLAR SYSTEM
De Guzman, M.A.I., Mabini, J.M.A., Mendoza, L.L.T.

imported fossil fuels. Unfortunately, some utilities perceive net metering policies as lost

revenue opportunities. In fact, net metering policies create a smoother demand curve for

electricity and allow utilities to better manage their peak electricity loads. By encouraging

generation near the point of consumption, net metering also reduces the strain on

distribution systems and prevents losses in long-distance electricity transmission and

distribution. [3]

The researchers will conduct a study in order to assess the present net metering

utilizing solar system connections handled by BATELEC II. Everything around and related

about net metering is considered a viable part of the research made. Simulations will be

attempted in order to analyze the secondary circuit of the distribution network involving

the net metered customer using the data that will be gathered. The return of investment

will also be calculated together with the payback period in order to assess the financial

feasibility of installing grid-tied solar technology connected to BATELEC II.

Objectives of the Study

The primary objective of the study is to assess the Batelec II Net Metering Utilization

Scheme for Customers Adopting Grid Tied Solar System.

Specifically, the study aimed to:

1. Determine related data and information about customers’ net metering

utilization scheme with PV systems implemented by BATELEC II.

1.1 Photovoltaic array installed capacity

1.2 Inverter specifications

1.3 Customers’ load consumption

1.4 Temperature profile

EVALUATION OF NET METERING UTILIZATION SCHEME OF CHAPTER I: THE PROBLEM AND ITS BACKGROUND | 4
BATANGAS II ELECTRIC COOPERATIVE, INC. (BATELEC II)
CUSTOMERS GRID TIED SOLAR SYSTEM
De Guzman, M.A.I., Mabini, J.M.A., Mendoza, L.L.T.

2. Design secondary circuits of low voltage distribution networks with PV

array-based net metering systems under different penetration scenarios

using ETAP by load flow analysis:

2.1 Without solar photovoltaic systems

2.2 Present network

2.3 Solar photovoltaic capacity is equal to 50% of the transformer

capacity

2.4 All customers whose monthly electricity consumption is more

than 120 kWh install net-metered solar photovoltaic systems

3. Analyze the simulated load flow analysis of the secondary circuit of the net

metering utilization scheme under different penetration scenarios in terms

of:

3.1 Transformer Loading

3.2 Power Factor

3.3 Voltage Level

4. Determine the overall economic impact of Net Metering Solar System

implemented by BATELEC II on:

4.1 Prosumers/consumers with grid-tied PV systems

4.2 Distribution Utility

4.2.1

Paradigm of the Study

The paradigm of the study shows a brief overview of the study and for better perceptive,

a model is presented. The illustration given represents the primary intent of the study. The

paradigm shows the coherent process to be considered in evaluating the net metering
EVALUATION OF NET METERING UTILIZATION SCHEME OF CHAPTER I: THE PROBLEM AND ITS BACKGROUND | 5
BATANGAS II ELECTRIC COOPERATIVE, INC. (BATELEC II)
CUSTOMERS GRID TIED SOLAR SYSTEM
De Guzman, M.A.I., Mabini, J.M.A., Mendoza, L.L.T.

scheme of BATELEC II from their operation during 2016 up to present. From analyzing

the collected materials will be a support for the assessment and presentation of

advantages and disadvantages of net metering in both parties.

To present the analysis of the net metering utilizing solar power systems
implemented by BATELEC II.

1.

To analyze the secondary circuits with grid-tied solar home systems’ before and
after installation operation and compare the following:
 Average demand
 Peak demand
 Load Factor
 Rated Capacity
 Occurrence of Peak demand

To evaluate the secondary circuit involving the net metered customer and conduct the
following:
 Load Flow Analysis

To identify the effect of selling electricity to the grid using solar net metering system on:
 Prosumers
 Customers connected within the same circuit
 Distribution Utility

To provide economic study on the Net Metering implemented for customers of BATELEC II.

 Optimal PV system sizing

 Return on Investment

Evaluation of Net Metering Utilization Scheme of Batangas II Electric

Cooperative, Inc. (Batelec II) Customers' Grid Tied Solar System
EVALUATION OF NET METERING UTILIZATION SCHEME OF CHAPTER I: THE PROBLEM AND ITS BACKGROUND | 6
BATANGAS II ELECTRIC COOPERATIVE, INC. (BATELEC II)
CUSTOMERS GRID TIED SOLAR SYSTEM
De Guzman, M.A.I., Mabini, J.M.A., Mendoza, L.L.T.

Figure. 1.1 Conceptual Framework

Scope and Delimitations

Initially, this study will confine itself to surveying and evaluating the prosumers that are

connected to BATELEC II. From the list of applicants for Net Metering connection, the

fourteen (14) that are currently energized and approved by ERC are going to be the focal

point of the study. The prosumers and the neighboring properties that share the same

secondary circuit will have their electric consumptions studied. The study focuses primarily

on the evaluation of the operation on the secondary network of distribution involving the

net-metered customer, cost-effectiveness of net metering utilization using grid-tied solar

system, and determining the optimal size of PV system that should be installed, and the

return on investment.

The study includes the assessment of the equipment used in establishments where the

survey is done. The specifications of the equipment used by the net-metered customers

will be gathered for formulating the output. Analysis of the low-voltage network will be done

using a simulation software called ETAP in order to accurately approximate operations

involving the secondary circuit and net metered customer. Assessment of the investments

made by the customers who own grid-tied solar systems will also be done in order to

determine the return on investment and solar payback period.

The study delimits itself to Batangas II Electric Cooperative consumers with grid-tied

solar power system, specifically located in Lipa, Rosario, and Taysan. Also, the gathering
EVALUATION OF NET METERING UTILIZATION SCHEME OF CHAPTER I: THE PROBLEM AND ITS BACKGROUND | 7
BATANGAS II ELECTRIC COOPERATIVE, INC. (BATELEC II)
CUSTOMERS GRID TIED SOLAR SYSTEM
De Guzman, M.A.I., Mabini, J.M.A., Mendoza, L.L.T.

of data delimits itself to the prosumers that will agree to giving information related to our

study. The research seeks to analyze only the secondary connections involving the net

metered system. The systems studied can only have a maximum capacity of 100 kW, as

defined in Section 4(j) of Republic Act No. 9513, operating at the import-export net

metering rate actualized by BATELEC II. Off-grid and hybrid solar power systems are not

going to be tackled intensively in this study.

Significance of the Study

The study serves as an important tool for the following:

To the students, this study will be an instructive reference material for the study of

renewable energy, particularly solar energy.

To the community, this study will bring awareness and insight to help understand the

capabilities and implications of installing grid-tied solar power systems.

To the Electrical Engineering department, this study will serve as an informative

reference for advanced studying on renewable energy.

To the future researchers, this will provide information on renewable energy for

further pursuance of learning and higher application of the subject.

Definition of Terms

Avoided Cost. The minimum amount an electric utility is required to pay an independent

power producer, equal to the costs the utility calculates it avoids in not having to produce

that power (usually substantially less than the retail price charged by the utility for power

it sells to customers). [7]

EVALUATION OF NET METERING UTILIZATION SCHEME OF CHAPTER I: THE PROBLEM AND ITS BACKGROUND | 8
BATANGAS II ELECTRIC COOPERATIVE, INC. (BATELEC II)
CUSTOMERS GRID TIED SOLAR SYSTEM
De Guzman, M.A.I., Mabini, J.M.A., Mendoza, L.L.T.

Carbon Footprint. The total amount of greenhouse gases produced to directly and

indirectly support human activities, usually expressed in equivalent tons of carbon dioxide

(CO2). [8]

Demand. Electric demand refers to the maximum amount of electrical energy that is being

consumed at a given time. It is measured in both kilowatts and kilovolt amperes,

depending on the rate tariff.[4]

Cell. A solar cell is the basic component of solar modules. Cells are manufactured from

wafers. [8]

Distributed Generation. Refers to a system of small generation entities supplying directly

to the distribution grid, any one of which shall not exceed one hundred kilowatts (100 kW)

in capacity. [9]

Electrical Load factor. A measure of the utilization rate, or efficiency of electrical energy

usage. It is the ratio of total energy (KWh) used in the billing period divided by the possible

total energy used within the period, if used at the peak demand (KW) during the entire

period.[6]

Feed-In Tariff. Feed-In Tariffs (also known as FITs) are payments to ordinary energy
[10]
users for the renewable electricity they generate.

Grid-Tied: A grid-connected solar electric system which generates electricity and feeds

its excess power into the local utility grid for later use. Grid-connected solar electric

systems are eligible for many incentives and rebates.[8]

Inverter. The inverter electronically converts Direct Current (DC) power into Alternating

Current (AC) power and is required for grid-connected solar power systems.[8]
EVALUATION OF NET METERING UTILIZATION SCHEME OF CHAPTER I: THE PROBLEM AND ITS BACKGROUND | 9
BATANGAS II ELECTRIC COOPERATIVE, INC. (BATELEC II)
CUSTOMERS GRID TIED SOLAR SYSTEM
De Guzman, M.A.I., Mabini, J.M.A., Mendoza, L.L.T.

Insolation. Sunlight varies by region. Insolation is a measure of the solar radiation energy

in a given region. It is usually expressed as the intensity of light energy per unit of land

area. [8]

kWh. The abbreviation for kilowatt-hours, a unit of energy. One kWh represents a 1,000

watt load operated over a period of one hour—that's the amount of energy an average

plasma TV uses. Electricity rates are most commonly expressed in cents per kilowatt

hour.[8]

Module. Commonly called a “solar panel,” a PV module is composed of multiple solar

cells that are electrically connected to increase the total power output and are
[8]
encapsulated in tempered glass for weather protection and ease of handling.

Monocrystalline. Silicon is a metal and, therefore, its atoms are organized into a

crystalline structure. Monocrystalline refers to silicon that is pulled as a single, completely

homogenous crystal. Monocrystalline PV cells are generally the most efficient and reliable

available. [11]

MW. The abbreviation for megawatt, a unit of power or capacity of a generator. 1 MW =

1,000 kW = 1,000,000 W. [11]

Net-Metering. Net-metering allows the solar electric system to send excess electricity

back through the electric meter to the utility. The meter actually can run backwards. [11]

Peak Demand. The peak demand of an installation or a system is simply the highest

demand that has occurred over a specified time period.[5]

Photovoltaics (PV). Photovoltaics (PV) is the conversion of light into electricity using

semiconducting materials that exhibit the photovoltaic effect, a phenomenon studied in

physics, photochemistry, and electrochemistry. [11]

EVALUATION OF NET METERING UTILIZATION SCHEME OF CHAPTER I: THE PROBLEM AND ITS BACKGROUND | 10
BATANGAS II ELECTRIC COOPERATIVE, INC. (BATELEC II)
CUSTOMERS GRID TIED SOLAR SYSTEM
De Guzman, M.A.I., Mabini, J.M.A., Mendoza, L.L.T.

Silicon. The basic material used to make solar cells. It is the second most abundant

element in the earth’s crust, after oxygen. [11]

Stand-alone system. Energy generated by these systems is stored in batteries and then

subsequently used. Also known as “off-grid,” these systems are not connected to the utility

grid. [11]