What is the compensation for solar panels consumption surpluses?

Surplus compensation is a measure that has marked a before and after in the solar energy sector in Spain. After the update of Royal Decree 244/2019, consumers who take advantage of their solar panels’ consumption can send the additional energy generated to the grid to reduce their electricity bill up to €0.

Simplified surplus compensation is a form of photovoltaic self-consumption connected to the electricity grid. Thanks to this type of self-consumption, users will use the energy produced by their solar panels, but if at any time they do not generate enough to cover their energy demand, they will be able to use the network.

In addition, if the installation produces more energy than is consumed, the distributor through the marketer with whom they have contracted the electricity supply will financially compensate them for the kilowatts discharged into the network at the end of each billing period.

Requirements to benefit from the simplified surplus compensation mechanism

The installations of photovoltaic solar panels that take advantage of this self-consumption modality can be individual or collective (connected to the internal network) and must meet the following requirements:

  • The energy source must be renewable.
  • The power of the installation or associated installations cannot be greater than 100 kW.
  • The consumer has adhered to a single supply contract for consumption with a marketer.
  • The consumer (owner of the supply) and producer (owner of the installation) have agreed to a surplus compensation contract as specified in article 14 of RD 244/2019.
  • The consumer will not be able to benefit economically because it is not a remunerative activity. You can only compensate for the energy that you have not consumed, so the result of the bill will never be negative.

I want to benefit from collective self-consumption with surpluses, what do I need?

Those consumers who want to take advantage of collective self-consumption with surplus compensation must meet the above requirements and sign an energy distribution agreement. To formalize this document, the distribution mechanism contained in RD 244/2019 can be used. However, any other mechanism that is agreed upon between the associated consumers and has all the established requirements will be legal. Here there is the professional processing guide for everyone that want “auto-consumo” 

Likewise, the consumers participating in the collective self-consumption installation must notify the distributor of the type of self-consumption they have at that time and their interest in taking advantage of the simplified compensation modality. To do this, they must deliver the distribution agreement of the associated consumers in which the conditions of said agreement are stated and the marketer can initiate the adaptation of the supply contracts.

What price does the marketer compensate me for my surplus energy?

Accounting for surplus energy is a very simple process. At the end of each billing period (maximum one month), the bidirectional meter of the corresponding installation is read and the marketer applies a discount on the electricity bill based on the kilowatts that have been discharged.

The price of self-consumption surpluses covered by simplified compensation (PVPC) is usually around 4 and 5 cents per kWh discharged. 

Unlike other companies, we compensate you with the market rate of the price given by your distributor per kWh to ensure you get the very best rate for the energy you produce! The market rate means that prices are variable to ensure you get the best rate for the energy you produce.
From our recent prices in September/October 2022, our clients’ surplus consumption averages at 0.09€ per kWh.*

*Please note, this is not a fixed rate, this is based on an average of the market price for solar surplus compensation for our clients in Spain in August with residences with registered autoconsumo installations, as always, prices are subject to vary.

The compensation that the consumer receives for its surplus energy will depend on whether or not the supply contract is in the regulated market:

  • If the consumer is included in the regulated market with a reference retailer, the amount at which surpluses are compensated will be the price of energy at the time in which the surplus energy was discharged, less the cost of diversions. Therefore, if the photovoltaic system carries out the dumping of surpluses at 2 in the afternoon, the value that will appear on the electricity bill will be the price of energy corresponding to that time slot.
  • On the other hand, if the consumer is in the liberalized market, compensation for surplus energy is valued based on the contract price. Therefore, the amount at which the kilowatt will be compensated will be the one agreed with the free marketer.

It is very important to bear in mind that the maximum value that can be compensated in the electricity bill is the amount of energy purchased. This means that the amount received for compensation can never be negative, nor discount the price of access tolls. Here is the link to the Real Decree from BOE, Art 14. 

What is the difference between net balance and simplified compensation?

To this day, there are still many who confuse the term Net Balance with simplified compensation. However, the Net Balance has not been approved in Spain, unlike in other countries.

The new self-consumption law appeals to the concept of simplified surplus compensation and it is convenient to distinguish the difference between one and the other:

  • In the specific case of the Net Balance, as the name indicates, it is a calculation that compensates for the energy produced and consumed. Therefore, this means that both consumers and marketers can benefit. If the user consumes less energy than their solar panels have generated, the marketer will pay the price per kWh indicated in the rate. In the same way, if the user uses more energy than their panels have produced, the user will pay for that energy consumed to the marketer at the cost set by the rate. This mechanism is for big installations like industrial facilities with solar panels that produce more than 100 kW.
  • On the contrary, in the case of simplified compensation, the value of the rate for energy consumed and that of surplus energy at different prices are differentiated. These prices will be different depending on whether you are in the reference market (established by the State) or free (whatever you agree with your marketer at a fixed price). Only individuals with production facilities whose capacity does not exceed 100 kW may be associated with this mechanism.

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