RIGHTS OF ACTIVE CONSUMERS AND PROSUMERS

1. Meaning of Active Consumers and Prosumers

An active consumer, commonly called a prosumer, is an electricity consumer who does more than passively purchase electricity. A prosumer may generate electricity through rooftop solar panels, consume that electricity, store it in batteries, sell surplus electricity to the grid, participate in demand-response programmes, provide flexibility services or join an energy community.

Modern electricity law increasingly recognises that consumers can become market participants. The European Union provides one of the clearest legal frameworks. Article 15 of Directive (EU) 2019/944 requires Member States to allow final customers to act as active customers without disproportionate or discriminatory technical requirements, procedures or charges. Active customers may generate, store and sell electricity and participate in flexibility schemes.

2. Right to Generate and Self-Consume Electricity

Article 21 of the Renewable Energy Directive (EU) 2018/2001 establishes a specific right to become a renewable self-consumer. Consumers may generate renewable electricity for their own consumption and sell surplus production through suppliers, power-purchase agreements, aggregators or peer-to-peer arrangements.

This represents a major change from traditional electricity regulation, which treated consumers principally as recipients of electricity supplied by licensed utilities.

The law also seeks to prevent excessive regulatory burdens. Self-consumers should not ordinarily face discriminatory or disproportionate procedures or network charges that are unrelated to the costs they impose on the electricity system.

3. Storage and Flexibility Rights

Active consumers increasingly combine renewable generation with batteries and electric vehicles. EU electricity law provides that active customers owning storage facilities should have access to grid connection within a reasonable period, should not face disproportionate licensing requirements and should generally avoid double network charging for electricity stored and later used or supplied as flexibility.

Active consumers may also participate through aggregators in demand-response and balancing markets. Electricity-system operators must treat qualifying demand-side resources in a non-discriminatory manner alongside conventional generators.

4. Energy Sharing and Consumer Protection

Recent EU reforms further strengthen the concept through a statutory right to energy sharing. Eligible consumers may share renewable electricity under private arrangements or through organised structures while retaining their ordinary rights as final customers.

Prosumer status therefore does not remove consumer protection. Active customers retain rights concerning contracts, billing, switching, transparency and dispute resolution.

The regulatory challenge is to balance prosumer participation with responsibility for network costs, metering and system balancing. Prosumers benefiting from the public grid may legitimately be required to contribute through transparent and cost-reflective charges.

5. Case Law

Finanzamt Freistadt Rohrbach Urfahr v Fuchs, Case C-219/12, EU:C:2013:413

Facts: Mr Fuchs installed photovoltaic panels on his home. The installation produced less electricity than his household consumed, but all electricity generated was supplied to the network for remuneration.

Legal Issue: Whether operating a residential photovoltaic installation constituted an “economic activity” for VAT purposes.

Judgment: The Court of Justice held that electricity generation and continuous sale to the network for remuneration constituted an economic activity.

Legal Principle/Ratio: Household-scale electricity generation can constitute genuine economic participation where electricity is supplied for continuing remuneration.

Significance: The case is an important early judicial recognition of the consumer-producer model. A household generating electricity can simultaneously function as a consumer and an economic electricity producer.

Solar Century Holdings Ltd v Secretary of State for Energy and Climate Change [2016] EWCA Civ 117

Facts: Renewable-energy developers challenged the UK Government’s early closure of part of the Renewables Obligation support regime.

Legal Issue: Whether renewable generators had an enforceable expectation that existing support arrangements would continue unchanged.

Judgment: The Court of Appeal rejected the challenge, holding that government policy could change within the statutory framework.

Legal Principle/Ratio: Participation in renewable-energy markets does not create an unlimited right to preservation of existing subsidy arrangements.

Significance: The principle is relevant to prosumers because rights to generate and sell electricity must be distinguished from expectations concerning particular subsidy or tariff levels.

6. Regulatory Importance

Prosumer rights transform electricity law from a one-directional utility model into a participatory energy system. Legal frameworks increasingly protect rights to self-generation, storage, export, aggregation, flexibility and energy sharing while preserving balancing responsibilities and fair contributions to network costs. The emergence of active consumers therefore represents both a decentralisation of electricity markets and a broader redistribution of legal power from traditional utilities toward individual consumers and energy communities.