Egypt to impose ‘merger fee’ on net-metered solar

Law firm Riad & Riad has confirmed the levy will be applied but said the level of the charge had not been determined, despite a report to the contrary in one local newspaper.

Egyptian law firm Riad & Riad has confirmed plans have been announced by the national electricity regulator to apply a ‘merger fee‘ to net-metered solar systems in the country, but cast doubt on reports the level of the charge has already been determined.

A report published in the Daily News Egypt newspaper last week – and subsequently carried by news wire Reuters on the Zawya Middle Eastern news website run by New York-based Refinitiv – stated the Egyptian Electricity Utility and Consumer Protection Regulatory Agency (EgyptERA) will levy a fee of EGP0.10-0.40/kWh (€0.0054-0.0218) on net-metered solar arrays, to cover the cost of integrating them into the grid network.

Riad & Riad confirmed the decision to impose the fee, as part of EgyptERA Decision No. 2/2020 on new net-metering rules, but told pv magazine the level had not yet been determined and would be announced in due course on the regulator’s website.

The newspaper report cited opposition to the move from solar installers in Egypt, as the proposed charge would be levied in addition to the fee paid for connecting systems to the grid, which Riad & Riad said is determined on a system-by-system basis.

Solar industry spokespeople quoted in the Daily News Egypt article pointed out the nation already imposes a 2% import duty on the components used in solar and wind projects.

Development institution the European Bank for Reconstruction and Development loaned the Egyptian Electricity Transmission Company €183 million as recently as November to invest in strengthening the national grid.

It is not clear whether the merger fee will be applied to existing arrays as well as new systems and EgyptERA has not responded to inquiries from pv magazine about the levy and how it will be applied.

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