In today's article from the "Lawyer on the Farm" series, as you expected, we will answer the question of whether a farmer can be a prosumer, and we will also explain what the net-billing system is.
Pursuant to the Act of 20 February 2015 on renewable energy sources (hereinafter referred to as the " RES Act "), a prosumer is an end user who purchases electricity on the basis of a comprehensive contract, as well as who generates electricity exclusively from renewable energy sources in micro-installations, for the purpose of consuming it for their own needs, unrelated to the business activity conducted, regulated by the Act on freedom of economic activity.
Due to the fact that agricultural activity is regulated by the Agricultural Tax Act, and not the Act of 6 March 2018 – Entrepreneurs' Law (hereinafter referred to as the " Entrepreneurs' Law "), there are no contraindications to a farmer being a prosumer and using the so-called net-billing system. Furthermore, it should be noted that the Entrepreneurs' Law itself explicitly states that the regulations do not apply to agricultural production activities in the field of agricultural crops, animal breeding, horticulture, market gardening, forestry, and inland fisheries.
In light of the above, it should be clearly stated that farmers can also become prosumers. However, due to changes in the prosumer billing system, we will present a new billing system – net billing – later in this article.
We often hear farmers commenting that the new billing system is unprofitable and generates higher costs. First, we point out that net billing means that if unused energy is fed into the grid, it will be collected based on the hourly price. We explain that this system works on a simple principle: for every 1 kWh of energy generated and made available to the grid as surplus, the farmer receives the equivalent energy at the current electricity price (hourly price). However, if the energy is purchased from the grid, the farmer will be required to pay a higher price, as additional fees (fixed costs) will be added. On the one hand, this is a drawback of this system, but on the other hand, despite the higher prices, farmers do not have to worry about losing 20% of the energy they have delivered, as was the case with net metering.
Due to constant changes in energy prices, this system certainly seems unpredictable. Nevertheless, we believe that new technologies and equipment, which consume very large amounts of electricity, play a crucial role in current agriculture. Therefore, if farmers want to make the most of the current system, they should consume as much energy as possible during the day, during the current production of energy from renewable sources, thus increasing self-consumption. Any surplus produced should be sold to the grid.
It's worth explaining that each farmer-prosumer has an individual account to which funds from the sale of surplus energy are transferred and can be used within one year. If the funds in the prosumer account are not used in full within a year and do not exceed 20% of the value of energy sold in a given month, they will be returned to the prosumer, with hourly prices applying for settlement.
In summary, we explain that farmers who have their own micro-installations can also be prosumers. Currently, farmers use net-billing, which can be extremely beneficial if the photovoltaic installation is properly sized to the farmer's needs, as the current system is in no way conducive to producing large surpluses of electricity. In our opinion, self-consumption—particularly daily consumption—and investing in energy storage are certainly an interesting way to avoid selling energy at unpredictable prices.
In the next articles, which we invite you to read now, we will continue the topic of Renewable Energy Sources!
This article is for informational purposes only and does not constitute legal advice.
Legal status as of September 5, 2024
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