How to Produce, Use and Sell Electricity in Serbia

Using solar energy is getting easier in Serbia

Renewable energy sources – Buyer – Producer and Electricity Supplier relationship in the case of a solar power plant

The Law on the Use of Renewable Energy Sources (“Official Gazette of the RS”, No. 40/2021), (“the Law“) provides a theoretical and as of recently practical possibility for natural persons and legal entities under certain conditions to be buyers-producers of electricity produced by solar panels. Namely, this is a European trend that has taken root in the Republic of Serbia, and reflects the ability of anyone who wants to invest in renewable energy sources, specifically in a solar power plant on the roof of a house, building, factory or other facility and then generate electricity for own needs as a buyer-producer.

Article 4 of the Law defines the buyer-producer as follows: “The buyer-producer is the final buyer who has connected his own facility for production of electricity from renewable energy sources to internal installations, whereby the produced electricity is used to supply own consumption, and surplus electricity produced is delivered to the transmission system, distribution system, or closed distribution system “(“Prosumer“).

So, the essence is that Prosumer can partially or completely satisfy its needs for electricity in this way. The initial investment is high, but it pays off in a few years. Prosumer is still obliged to be connected to the Electric Network and to transfer to it the surplus electricity it produces in certain (summer) months, and also has the right to be supplied with electricity in the months when the solar power plant does not produce enough electricity for its needs. Therefore, Prosumer concludes a contract on full supply, i.e., a contract on the purchase of electricity with the supplier in accordance with the Law on Energy (“Official Gazette of RS”, No. 145/2014, 95/2018 – other law and 40/2021, “Law on Energy“).

The sequence of steps is as follows. First, the construction of a solar power plant is being carried out, the installed capacity of which must not be higher than the existing approved connection power. Responsibility for this part of the work rests entirely with Prosumer. The metering point is then adjusted by the Prosumer submitting a request for adjusting the metering point by e-mail to Electrodistribution of Serbia (“EDS“). In the pre-scheduled time, EDS workers ensure the voltage-free state at the measuring point, remove the seals and dismantle the existing measuring device. The adjustment of the measuring point is then performed by a company with the appropriate license, which was hired by Prosumer. After that, EDS workers control the measuring point, seal the devices and establish power supply to the Prosumer facility. If the Prosumer connection, with the metering point cabinet, is not owned by EDS, it is necessary to sign a contract on taking over the metering devices with EDS in accordance with the Energy Law. The third step is to conclude a contract on full supply with net metering or net billing.

In this sense, we distinguish two types of Prosumers:

  1. legal entities and entrepreneurs and
  2. households and housing communities.

Legal Entities and Entrepreneurs as Prosumers

The Supplier has the obligation to offer the Contractor who is a legal entity or entrepreneur a contract for complete supply with net calculation in accordance with the criteria and conditions prescribed by the Decree on Criteria, Conditions and Manner of Calculating Receivables and Obligations between Buyers – Producers and Suppliers., No. 83/2021 – hereinafter: the “the Decree”). Net billing is a method of billing net electricity, in which the value of surplus delivered electricity is calculated and charged during one month on the basis of a contract between the Prosumer and the supplier. Public Enterprise Electric Power Industry of Serbia (“EPS“) announced on March 4, 2022 as a supplier the models of these contracts. The subject of the contract are the quantity and price of electricity, the manner of calculation and issuance of bills, the rights and obligations of both contracting parties, the suspension of supply, etc. It is important to say that neither the Law nor the Decree regulates the purchase price for surplus electricity that Prosumer transfers to Electric Network. This is the subject of agreement between the contracting parties, which will depend on several factors that have not been made public.

Households and Housing Communities as Prosumers

The supplier has the obligation to offer the buyer-producer, which is a household or a residential community, a contract on complete supply with net metering in accordance with the criteria and conditions prescribed by the Decree. Net metering is a method of calculating net electricity, in which the surplus of delivered electricity, during one month, reduces the net amount of electricity during the next month, which practically means that unlike the net calculation, where the surplus delivered to the grid is obtained money for at the agreed price, here Prosumer “transfers” the surplus of electricity to the next month and thus reduces the amount of electricity consumed next month.

The period for settling receivables and liabilities between Prosumers and suppliers is one year and ends on 1 April. The buyer-producer is not entitled to claims for the amount of delivered electricity that is greater than the amount of taken over electricity from the supplier in the settlement period, which applies to both types of Prosumers.

Therefore, the motive of the legislator in introducing the institute of “buyer-producers” or “prosumer” is not of a commercial nature. In fact, the goal is to enable everyone to use renewable energy sources, in a simplified procedure, as already explained. The fact that Prosumers who are legal entities and entrepreneurs are paid compensation for excess electricity that they return to Electric Network is of a lucrative nature, because it generates income for Prosumer, but the essence of that possibility is to increase the profitability of such investments and the popularity of renewable energy investments.