The Micro-Capacity Power Plant Regime
The legal frame of solar energy contracts begins with Article 38 of the Georgian Law on Energy and Water Supply. The owner of a micro-capacity power plant, a final consumer using such a plant, or a group of final consumers, may connect the plant to the distribution network and supply the surplus electricity produced by it, defined in accordance with a legal act of the Commission, into the distribution network under the conditions established by the distribution network rules and the supply rules. The right to purchase the surplus electricity delivered into the distribution network belongs to any supplier of electricity in accordance with the supply rules, while in the cases and under the conditions defined by the same rules the surplus is purchased by the universal service supplier in whose service area the plant is located, and/or by another supplier bearing a public service obligation imposed in the manner established by this law. The conditions of the final consumer's use of surplus electricity, including the netting conditions between electricity produced by the micro-capacity plant and electricity consumed, as well as the purchase fee, are established by the Commission.
An important advantage of this regime is the absence of administrative burden: the production of electricity by a micro-capacity plant and the supply of surplus energy are not covered by the regulatory regime established by the energy law, the Law on Licenses and Permits and the Law on Regulation Fees, and the legislation regulating market relations applies to such plants only in the cases directly provided for. A final consumer who supplies surplus energy into the distribution network is exempt from paying the fee for system and market operation services. For the stability of the system, the aggregate capacity of micro-capacity plants connected to the distribution network must not exceed the maximum amount determined by the Commission on the basis of consultation with the system operators.
Standard Terms of the Supply Contract
Under Article 104 the Commission approves the standard terms of the supply contract, which define the conditions of continuous and reliable supply of electricity or natural gas to household consumers and small enterprises. An electricity or natural gas supplier is obliged to conclude a supply contract with a household consumer and/or small enterprise in accordance with those standard terms, and a contract is deemed concluded under standard terms upon connection to them in the manner established by the Commission. Refusal to provide service, as well as a request to discontinue supply to a final consumer, is possible only in two cases: in force majeure or security-related cases defined by the relevant legislation, or where the consumer, despite the supplier's warning, does not fulfill the obligations defined by the supply contract, including payment for the service received. This construction protects the small consumer from arbitrary disconnection while preserving the supplier's leverage over non-payment.
The Bilateral Contracts Market and Its Platform
Article 120-1 regulates the bilateral contracts market: the purchase and sale of electricity on the basis of bilateral contracts is carried out on the bilateral contracts market, through direct negotiation between market participants and/or through the bilateral contracts platform. Market participants are obliged to report on concluded bilateral contracts in accordance with the regulated enterprise reporting rules approved by the Commission. The platform administrator ensures the administration of the platform in the manner defined by the law and the electricity market rules, records the data of purchase and sale offers on the platform, registers the participants and maintains the relevant registry, submits reports to the Commission on its activity and exercises other powers under the market rules. Significantly, the administrator of the platform is not allowed to simultaneously conduct any other electricity activity apart from market operation — a rule established to prevent conflicts of interest and to keep the trading infrastructure neutral toward all participants.
The Final Consumer's Choice of Supplier
Article 166 regulates the supplier choice regime. The Government of Georgia is authorized, for the opening of the market and/or the implementation of the relevant stage of the market model concept, to determine in phases the mandatory criteria and deadlines upon whose satisfaction the final consumer chooses a supplier in a mandatory manner. A consumer registered as a subscriber of a distribution license holder who, upon completion of unbundling, does not have a contract concluded with a supplier in the manner established by this law, receives electricity supply service from the universal supplier or from another energy enterprise performing a public service obligation, under the procedure and conditions established by the Commission. This is a protective net: during the transition period the consumer is not left without supply, while the consumer's right subsequently to choose an acceptable supplier in the manner established by Georgian legislation remains unrestricted. For a solar producer selling through contracts, this architecture defines who the counterparties are at each stage of market opening and how the transition to full supplier choice is managed.
Frequently Asked Questions
Below are frequently asked questions about solar contracts.
Can surplus energy be supplied into the network?
Yes — surplus electricity is supplied into the distribution network; any supplier may buy it; in defined cases — the universal supplier.
Does a micro-capacity plant need a license?
No; the regulatory regime does not apply to its production or surplus supply.
What is the bilateral contracts market?
Purchase and sale between market participants by direct negotiation or through the platform; reporting is mandatory.
Can the consumer choose a supplier?
Yes; the Government sets mandatory criteria as the market opens, and a subscriber without a contract remains protected by universal service.
How We Help on Legal.ge
The Legal.ge team assists solar producers and consumers alike: we explain the micro-capacity regime, prepare surplus-sale and supply contracts, check the standard terms, and protect your interests when choosing a supplier. Contact us — we will review your situation and help you choose right.