Solar Revolution: French Aid Can Boost or Stifle Growth

If renewable energy—especially solar—is going to thrive in Cambodia, we need net metering. Without a net metering law or policy, solar will plod along. With it, solar will spread rapidly nationwide.

—Opinion—

What is net metering? It’s when customers install their own electricity generation (rooftop solar panels, for example) and a meter reads both electricity consumption and production. Any electricity the house feeds into the grid is credited toward the customer’s consumption. A house can both provide energy to and take energy from the grid.

Net metering is already a success in many countries, from the U.S. to Germany and Brazil, the Philippines to Sri Lanka. In Italy, for example, net metering expanded solar and made it possible for consumers buying solar home systems to repay their investments, thanks to savings and benefits from pumping their electricity to the grid. Wherever it flourishes, net metering has also reduced pressure on the grid by allowing homes to push power into the grid during peak times.

But thus far, Cambodia doesn’t have anything resembling a net metering law. Although the Ministry of Environment and the Ministry of Mines and Energy have expressed ever greater interest in net metering, Electricite du Cambodge, the state power company, and the Electricity Authority of Cambodia, which manages electric power, are lagging behind. They have yet to publicly consider such a law. This is not unexpected. Utilities worldwide have occasionally resisted net metering, even though it enhances energy security and boosts renewable energy. After all, though nearly everyone else benefits, utility companies potentially face losing market share and profits.

If it is unsurprising that state agencies have yet to move on net metering, it is far more surprising that the French Development Agency (AFD) is also silent. The AFD is giving the Cambodian electricity authorities 70 million euros, or about $77 million, for the extension of power lines through Koh Kong, Kratie and Kompong Cham provinces. Grid extension in Cambodia, financed by the AFD, will threaten the solar industry unless it is coupled with net metering.

Why? For the simple reason that bringing the grid all over the country makes it unlikely that people will invest in solar. Misinformed customers feel they have little reason to buy solar when they hear that the grid is coming to their village soon. They are told they can just wait and connect cheaply. But they are misinformed because a connection fee to the grid can cost $120 and they must pay for every kilowatt-hour they use, whereas a simple home solar energy system for two lights and a plug costs only about $100, and the electricity they generate is free.

Grid extension without net metering lessens the incentive to invest in solar, even with pay-as-you-go models or microfinance loans that allow customers to slowly pay off their home solar energy systems. Right now, we are missing a real opportunity to strengthen solar by extending the grid with net metering.

This is a challenge for Cambodia’s energy future. Without solar, we are stuck with big hydroelectricty and coal. Electricity doesn’t materialize out of nowhere like Harry Potter magic—it has to come from one source or another.

At present, Cambodia’s national grid is fed by hydropower, diesel or coal. Hydropower and coal lock the country into energy dependency and threaten Cambodia’s energy security, as a majority of its electricity is imported. Coal and diesel also generate substantial air pollution. Big hydroelectric dams are expensive, and they cause conflicts and impoverish local communities. The Mekong River Commission estimated that the 11 proposed main-stem dams on the river could cause a loss of up to 42 percent of fish in the river system, threatening food security and development for hundreds of thousands of Cambodians.

The French agency’s lack of commitment to net metering is all the more surprising because it has committed to ambitious environmental goals in public pronouncements. In its 2012 to 2016 strategic plan, the AFD made sustainability its core objective with the goal of balancing economic and social development with environmental protection. Net metering would promote such goals.

Similarly, the French government made climate change and renewable energy commitments at the recent global climate change con­ference in Paris. But when former Foreign Minister Laurent Fa­bius signed the agreement for Cambodia’s energy loans in October, nothing was proposed for net metering.

As the AFD has the influence needed to link energy aid to net metering, the energy sector is asking: Will it change course and create a level playing field for renewable energy? Or will the AFD encourage policies likely to stifle solar for the next decade and maybe beyond?

Etelle Higonnet has conducted research for Human Rights Watch, Amnesty International and Greenpeace Southeast Asia, and is now Waxman Strategies Campaign and Legal Director.

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