After installing solar panels, ensuring the replacement of old meters with modern bidirectional meters is crucial as old meters can run backwards when excess electricity is fed into the grid, inaccurately recording usage.
This can be deemed as electricity theft in many places, including Australia, due to incorrect billing favouring the customer, defrauding electricity companies.
The legality and the financial implications underline the importance of accurate metering and billing, promoting fairness and transparency in energy transactions.
Am I breaking the law if my electricity meter runs backwards after I had solar installed?
When installing solar in your home, there is usually a gap of several days or, in many cases, weeks between the solar system installation and the retailer replacing the electricity meter. During this time, it is essential not to turn on the solar system and leave it running. If you do turn on the system, then your electricity meter will run backwards and record a credit.
Is this a problem if my electricity meter runs backwards?
When your solar system generates more electricity than your home is using, the excess energy is sent back to the grid. In Australia, as in many other places, the electricity meter can track this exported energy. In older metering setups, this process could literally cause the meter to run backwards, showing a reduction in the electricity usage count.
The history of electricity meters
The history of electricity metering goes back to the early days of electrification. Initially, meters were straightforward devices, solely designed to record the consumption of electricity within a premise. These devices operated on simple mechanical principles, where the flow of electricity spun a disc, tallying the number of revolutions to indicate the amount of electricity consumed. However, these early models lacked the foresight of homes generating their own electricity and sending it back to the grid.
Here’s a more detailed breakdown of how this works:
Your solar panels convert sunlight into electricity which can be used in your home.
Older mechanical meters
In the case of older, mechanical electricity meters, this process of exporting excess electricity to the grid could cause the meter to spin backwards.
When electricity flows in the opposite direction, the meter spins backwards. This would mean when the meter reader comes past after you exported a lot of electricity the meter reading could be confusing, as your meter would show a lower number than the earlier reading. Electricity retailers pay much less for exported electricity than for imported electricity, which makes such a setup unfavourable for them.
Modern digital meters
Modern digital meters (often called smart meters or bidirectional meters) are designed to accurately measure and record the electricity flow in both directions – to and from the grid. These meters won’t run backwards but will separately track the electricity you consume from the grid and the electricity you export to the grid.
The electricity that you send back to the grid can earn you credits on your electricity bill, through a scheme known as a Feed-in-Tariff.
Is the electricity meter running backwards illegal?
Having an electricity meter run backwards can be illegal in many places, including Australia. The main reason is that it can inaccurately measure electricity usage and feed-in, potentially leading to incorrect billing, usually to the benefit of the customer. Naturally, the energy retailers do not like this at all.
They assert that accurately recording both the electricity consumed and the electricity exported to the grid is crucial to guarantee fair billing and just compensation for the electricity generated and sent back to the grid.
Households benefit from activating the solar system and allowing the meter to run backwards, as it enables them to save or earn credits at the same rate they pay for electricity. However, this practice costs the electricity company, as they would only pay their regulated rate or Feed-in Tariff for the electricity households send back. So rather than saving the total rate of electricity of 30c, which is happening when the meter runs backwards, they should only be paying 5c per kWh. For example, that would be payable. As such, in the above example, you are actually “stealing” or defrauding the electricity company by allowing the meter to run backwards by 25c per kWh.
What do the energy retailers say?
The energy retailers most likely will have this position: The legal aspect of a spinning meter underscores the necessity for accurate measurement and proper billing in the energy sector. In a way, it reflects the broader regulatory framework that governs energy transactions and ensures the integrity of the energy market. By ensuring accurate accounting for every kilowatt-hour of electricity, regulators and energy retailers can establish a fair and equitable environment for all parties involved. This legal stance is not only about protecting the financial interests of energy retailers but also about upholding the principles of fairness and transparency in the energy market.
When installing a solar system, it’s essential to include the setup of a modern bidirectional meter capable of accurately measuring electricity flow in both directions. If you notice your old meter running backwards after a solar installation, it’s crucial to contact your solar installer or your electricity provider to rectify the situation. They may need to replace the old meter with a modern digital or smart meter soon so it can handle bi-directional electricity flow.