Net Metering marked the first significant step towards the widespread adoption of solar photovoltaic systems in Cypriot homes.

In practice, it allowed consumers to generate their own electricity, use it immediately and effectively “store” any surplus in the electricity grid as credits. When their solar panels were not producing enough electricity, at night or during periods of limited sunshine, the credited energy would offset their consumption at no additional cost.

In this way, the grid acted as a virtual battery, absorbing surplus electricity and supplying it back when needed. This model worked effectively during the early stages of renewable energy adoption and provided a strong incentive for thousands of households to invest in solar PV systems.

Why Net Metering Could Not Continue

Over time, as the installation of solar PV systems became widespread, the energy system encountered a fundamental physical limitation.

The electricity grid must remain continuously balanced: the amount of electricity generated must match the amount being consumed in real time. When production exceeds demand (particularly around midday, when solar generation is at its highest) the grid can become overloaded and unstable.

If this imbalance is not properly managed, it can lead to serious technical problems and potentially even blackouts. For this reason, Net Metering has gradually been phased out across Europe, as the grid can no longer serve as an unlimited form of energy “storage”.

In Cyprus, the scheme remained in place until the end of 2025, allowing sufficient time for the transition to this new reality.

Net Billing: How Energy Compensation Works Today

Net Billing is the model currently in place. It is based on the actual value and flow of electricity, rather than treating the grid as a storage facility.

Under this model, the producer:

• uses the electricity generated by the solar PV system immediately,

• exports any surplus electricity to the grid, and

• receives compensation for that surplus at a lower, regulated rate.

However, because the grid does not store this electricity for later use, households must purchase electricity from the grid at the standard retail rate whenever their solar PV system is not generating enough – at night, during winter or at times of increased consumption.

Simply put, the grid no longer acts as a battery, making effective energy management more important than ever.

Energy Storage as a Response to Grid Limitations

Energy storage is not mandatory. In many cases, however, it can make a decisive difference to the system’s overall performance and financial return.

Instead of exporting surplus electricity to the grid at a lower rate, households can store it in batteries and use it later, when demand is higher or solar generation has stopped.

For households with greater electricity needs during the afternoon and evening, battery storage can significantly reduce reliance on the grid and improve the overall return on their investment.

Conclusion

Net Billing introduces a different approach to energy management and requires a new way of thinking.

It delivers the best results when the system:

• is designed correctly,

• reflects the household’s actual lifestyle and consumption patterns, and

• is not based on generic assumptions or oversimplified rules.

Today, access to accurate information and realistic system planning is more important than ever.

The EnergyIntel team can guide you based on your individual energy profile, offering technical expertise, clear advice and a pressure-free approach. Speak to our team.